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2009 (1) TMI 857 - AT - Income TaxChallenging the validity of Assessment - proceedings initiated by the AO u/s. 153C r/w s. 153A was void and without jurisdiction - search and seizure operation u/s.132 - assessee submitted that as a consequential to the search operation, no document was unearthed by the Department which had resulted in deduction of any undisclosed income - CIT(A) held that there is no legal requirement u/s. 153A/153C to record reasons or obtain prior approval of higher authorities for reopening of the assessment proceedings - he concluded that assessee's counsel has thoroughly misinterpreted the provisions of s. 153A/153C and has raised a frivolous and malicious objection with regard to the assessment proceedings HELD THAT:- It is evident that the Hon'ble High Court in the case of Abhay Kumar Shroff v. CIT [2007 (2) TMI 169 - JHARKHAND HIGH COURT] was of the opinion that under these provisions AO shall issue notice to furnish return of income in respect of the six assessment years and thereafter make assessment or reassessment for those six years. Nowhere the Hon'ble Court had held that the assessment or reassessment as contemplated in this section has to be based upon incriminating materials found during search. It is settled law -that in absence of jurisdictional High Court decision, decisions from the other Hon'ble High Courts are binding upon the Tribunal. It is also settled law that when language of the Act is plain and simple there is no requirement of any interpolation therein. Furthermore, as held by the Hon'ble apex Court in the case of Smt. Tarulata Shyam & Ors. v. CIT [1977 (4) TMI 3 - SUPREME COURT], casus omissus need not be supplied by Courts. Hence, we respectfully following the precedent as above, uphold the order of the CIT(A) on this issue. Computation of capital gains - depreciable assets - In our opinion, the present case clearly falls under the ken of s. 50. It is not disputed that this case pertains to capital gains on depreciable assets, where all fixed assets have been sold. Sec. 41(2) deals with such assets which are sold, discarded, demolished or destroyed. However, s. 50 has been captioned as special provision for computation of capital gains on depreciable assets and encompasses cases where block of assets ceases to exist. It is settled law that when language of the Act is plain and simple there is no requirement of any interpolation therein. Furthermore, as held by the Hon'ble apex Court in the case of Smt Tarulata Shyam & Ors. v. CIT [1977 (4) TMI 3 - SUPREME COURT], casus omissus need not be supplied by Courts. Hence, on a finding that the present case falls under the realm of 'special provisions of s. 50', we uphold the order of the CIT(A) on this issue. Further, the plea of the assessee that unabsorbed depreciation of AY 1997-98 to 2000-01 ought to have been considered as part of depreciation for AY 2005-06 is not tenable. It would be relevant to refer to the provisions of sub-s. (2) of s. 32(2) as amended by the Finance (No. 2) Act, 1996 w.e.f. 1st April, 1997 - It clear that the adjustment has been subject to sub-s. (2) of s. 32 hence this section also does not mandate adjustment of brought forward depreciation against the capital gains. Hence, we affirm the order of the learned CIT(A) on this issue. We further find that the CIT(A) has rightly held that an identical issue was found to have been adjudicated by the Tribunal by relying on the judgment of the Hon'ble Supreme Court in the case of CIT v. Artex Manufacturing Co. [1997 (7) TMI 7 - SUPREME COURT], held that in a case where itemized sale of assets and liabilities of an undertaking takes place, the nomenclature of "slump sale" cannot be assigned thereto and that in such a case short-term capital gain is to be computed in accordance with the provisions of s. 50. The facts of the present case also indicate that assessee company sold its fixed assets and goodwill for separate values. No current asset or liability was transferred. Hence the ratio from these decisions as above will apply. Claim relating to advances and bad debts written off - CIT(A) held that assessee could not furnish documentary evidence to establish their irrecoverability - HELD THAT:- It is clear that Hon'ble jurisdictional High Court in CIT vs. Brilliant Tutorials (P) Ltd.[2007 (1) TMI 147 - MADRAS HIGH COURT] was of the opinion that even after the amendment, an honest judgment has to be made as to whether the amount involved can be recovered or not. It is settled law that decision of Hon'ble jurisdictional High Court is binding upon the Tribunal. When assessee had not furnished necessary particulars of the debt as required by the lower authorities, a judgment in this regard cannot be made. Hence, in the interest of justice, we remit this issue to the file of the AO to give the assessee an opportunity to provide the necessary details and to prove that the judgment to write off these amounts was an honest one. In the result, this appeal by the assessee is partly allowed for statistical purposes.
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