TMI Blog2007 (7) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity to defend and without following the proper legal procedures against the principles of natural justice. As such, the order is null and void ab initio. 2. The order is against the provisions of the Act and the appellant denies his liability to tax as determined and computed by the learned AO and the manner in which it has been so determined or computed. The learned CIT(A) has erred in law in upholding the legal validity of the impugned order, whether in specific terms or by implication. 3. The learned AO has erred in law and on the facts and circumstances of the case in making additions of Rs. 1,01,400 on account of disallowance of depreciation and the learned CIT(A) has erred in law and on facts in sustaining the impugned add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. Thus, assessee's claim for depreciation amounting to Rs. 1,01,400 was declined by the AO which was attributable to the car confiscated during the year. By the impugned order, the CIT(A) confirmed the action of the AO. 3. Aggrieved by the order of the CIT(A), the assessee is now in appeal before us. It was argued by the learned Authorised Representative that the motorcar alleged to be taken back by the financier, was actually used by the assessee, therefore, the assessee was eligible for claim of depreciation. He relied on the decision reported at in the case of Oil Natural Gas Commission vs. Addl. CIT (1999) 64 TTJ (Del) 606, Tribunal Delhi Bench, in support of the proposition that taking of the car by the finance company does not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ec., 2001 for Rs. 4,85,775. The assessee bought a second car on 28th Dec., 2001 for Rs. 8,30,500. In the depreciation schedule, the assessee has claimed depreciation on the new car which remained its asset as at the end of the year. However, in the P L a/c, the assessee has claimed depreciation not only on the new car bought on 28th Dec., 2001, but also on the old car which was sold during the year and did not remain in its block of assets as at the end of the financial year. The AO allowed the claim of depreciation on the cost of new car only. However, the claim of depreciation on the balance in block of assets as on 31st March, 2002 was not computed which require the addition of new assets acquired during the year and reduction of money p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DV cl. (c) of s. 43(6) reads as under: 43(6) Written down value means- (a) (b) (c) in the case of any block of assets,- (i) in respect of any previous year relevant to the assessment year commencing on the 1st day of April, 1988, the aggregate of the written down values of all the assets falling within that block of assets at the beginning of the previous year and adjusted,- (A) by the increase by the actual cost of any asset falling within that block, acquired during the previous year; and (B) by the reduction of the moneys payable in respect of any asset falling within that block, which is sold or discarded or demolished or destroyed during that previous year together with the amount of the scrap value, if any, so, however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) or taxing the balancing charges as per s. 41(2) of the IT Act necessitated the keeping of records of depreciation already availed of by each asset eligible for depreciation. In order to simplify the existing cumbersome provisions, the Amending Act has introduced a system of allowing depreciation on block of assets. This will mean the calculation of lump sum amount of depreciation for the entire block of depreciable assets in each of the four classes of assets, namely, building, machinery, plant and furniture. 8. Moreover, the legislature has deleted the provision for allowing terminal depreciation in respect of each asset, which was previously allowable under s. 32(1)(iii) and also taxing of balancing charge under s. 41(2) in the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which he placed reliance on the decision in case of ONGC. We found that in this case, undertaking of assessee (ONGC) came to be transferred and vested in the statutory corporation w.e.f. 1st Feb., 1994 under the Oil Natural Gas Commission (Transfer of Undertaking Repeal) Act, 1993. This was not treated by the Tribunal as a transaction of sale, on the plea that there was no transfer by way of exchange, corporation has not transferred anything in favour of ONGC hence the transfer and vesting of assets did not come within the expression sold used in s. 43(6)(c) of the Act. However, the facts of the case before us are entirely distinguishable and the assessee himself in the depreciation schedule shown the value at which old car was sold th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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