TaxTMI 
TaxTMI 
1995 (3) TMI 10
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....ight in cancelling the order passed under section 154 of the income-tax Act, in the assessee's case for the assessment year 1968-69 ? 2. Whether, the Appellate Tribunal's view that the issue under dispute is highly debatable and, therefore, the provisions of section 154 could not be applied to the assessee's case is sustainable in law ? " For these three assessment years, the assessee had capital gains in respect of depreciable assets acquired before January 1, 1954. The Income-tax Officer had in the computation of capital gains for these three assessment years allowed the assessee in the original assessments the option of adopting the fair market value as on January 1, 1954. Later, he invoked section 154 of the Act and deprived the asses....
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....he fair market value as on January 1, 1954, in respect of the depreciable assets acquired before January 1, 1954. This view was adumbrated by various High Courts. The Gujarat High Court in the case of Rajnagar Vaktapur Ginning, Pressing and Manufacturing Co. Ltd. v. CIT [1975] 99 ITR 264, the Allahabad High Court in the case of CIT v. Upper Doab Sugar Mills [1979] 116 ITR 240, the Kerala High Court in the case of CIT v. Commonwealth Trust Ltd. [1982] 135 ITR 19 [FB] and the Calcutta High Court in the case of India Jute Co. Ltd. v. CIT [1982] 136 ITR 597, uniformly came to the conclusion that for the computation of income under the head " Capital gains " in respect of depreciable assets which had become the assessee's property before January....
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....tained in section 154 of the Act. Learned counsel for the assessee further submitted that in view of the provisions contained in section 55(2) of the Act, there is debate in the matter of ascertaining the cost of acquisition by adopting the fair market value as on January 1, 1954, by exercising the option. We have heard the rival submissions. In the above cited decisions, it was pointed out that the cost of acquisition of the depreciable asset is bound to be computed in accordance with section 50 of the Act. In other words, section 55(2) is applicable only in respect of sections 48 and 49 of the Act and it has no application to section 50 of the Act. Thus, where more than one High Court understood the provisions contained in section 50 and....