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JUDGMENT Ajay Kumar Mittal, J. - This order shall dispose of I.T.A. Nos. 292 and 305 of 2007, as, according to the learned counsel for the parties, the issues raised herein are identical. However, the facts have been taken from I.T.A. No. 305 of 2007. 2. I.T.A. No. 305 of 2007 has been preferred by the assessee under section 260A of the Income-tax Act, 1961 (in short, "the Act") against the order dated March 20, 2007, annexure A.1 passed by the Income-tax Appellate Tribunal "A" Bench, Chandigarh, in I.T.A. No. 442/CHD/2005 for the assessment year 1997-98. It was admitted on November 5, 2007, for determination of the following substantial question of law : "Whether, under the facts and in the circumstances of the case and under the established legal principles of law, the Income-tax Appellate Tribunal was justified in confirming the action of the authorities below in allowing the rectification of subsequent orders without rectifying the initial order from where the dispute in question arose ?" 3. A few facts relevant for the decision of the controversy involved, as narrated in I.T.A. No. 305 of 2007 may be noticed. The assessee is the director of M/s. Monga Brox. Ltd. and resident of Ludhiana. He filed income-tax return for the assessment year 1996-97 on December 24, 1996, declaring a total income of Rs. 1,98,630. He claimed certain deductions and set off of loss. On March 25, 1997, the Assessing Officer issued notice under section 143(2) of the Act to the assessee. During the course of the assessment proceedings, the Assessing Officer observed that certain expenses were being paid to the assessee as perquisites by the company which were to be taken as part of the income. The assessee admitted liability and these perquisites were added to the income of the assessee. Thereafter, the Assessing Officer considered loss under the head "Capital gains" amounting to Rs. 2,41,799 and allowed the capital loss to be carried forward. The assessee filed income-tax return for the assessment year 1997-98 on February 3, 1998, declaring a total income of Rs. 2,53,850. The assessee claimed deductions and set off of loss as were allowed to be carried forward in the previous…

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