1981 (12) TMI 97

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....t action due to his illness and subsequent death. In view of the abnormal circumstances we condone the delay and admit the appeal. 3. It is claimed that the Commissioner was in effect correcting the order of the AAC and that he was not entitled to do so. The learned Departmental Representative claimed that the issue in appeal was the computation of capital gains while the order of the Commissioner under section 263 related to the assessee's right to relief under section 54 in respect of such capital gains. While the learned Counsel for the assessee relied upon the decision of the Allahabad High Court in the case of J.K. Synthetics Ltd. v. Addl. Commissioner [1976] 105 ITR 344 the learned Depatmental representative relied upon the decision ....

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....he case of the learned Depatmental representative that merger theory cannot come to the assistance of the assessee in as much as the question of relief under section 54 was not the subject matter in appeal. Even granting that there is no absolute merger canvassed by the assessee we are not in a position to accept the Department argument in this case. The question of capital gains was certainly before the first Appellate Authority and has been adjudicated upon. Under section 54 the capital gains get reduced by the amount reinvested in the same category and this abatement was allowed by the ITO. This allowance in the context of assessee's status shown in the title to the assessment orders was a conspicuous part of the assessment. It could ha....

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....r statue. In our opinion the application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction................." It understood and purported to follow the decision of the Gujarat High Court in [1975] 98 ITR 255 in the following words : "The principle of this decision is that the doctrine of merger will have to be taken into account in the light of what was in controversy before the appellate authority or what could have been considered by the appellate authority". We therefore find that there is no authority in the said judgment of the Madras High Court for the view that any point which is not specifically consi....