COMMISSIONER OF INCOME TAX Vs. HARI SINGH

JUDGEMENT

(1.) THIS appeal by the Revenue is directed against the order dt. 4th Oct., 2005 passed by the Income -tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('the Tribunal') in ITA No. 412/JDPR/2005 [reported as Harisingh & Associates (AOP) vs. ITO : (2005) 98 TTJ (Jd) 628 - -Ed.] relating to the asst. yr. 1996 -97. By the order impugned, the Tribunal has allowed the appeal filed by the assessee and has set aside the order passed by the Commissioner of Income -tax -II, Jodhpur ('the CIT) on 24th March, 2005 in exercise of his powers under s. 263 of the IT Act, 1961 ('the Act'). This appeal has been admitted on the following substantial question of law:

(2.) AGAINST the assessment order dt. 31st March, 2004, the assessee preferred an appeal which was pending before the CIT(A) -II, Jodhpur. However, during the pendency of this appeal, the CIT -II, Jodhpur proceeded to issue a show -cause notice under s. 263 on 1st March, 2005 and ultimately, set aside the assessment order, treating the same as erroneous and prejudicial to the interest of Revenue. The only ground on which the learned CIT set aside the order of the AO was that the addition of Rs. 38,17,000 ought to have been towards undisclosed income of AOP instead of being taxed under the head 'Income from business'. The related parts of the order impugned read as under:

(3.) AGGRIEVED by the order aforesaid, the Revenue has preferred this appeal which has been admitted on the question of law as noticed at the outset.