TMI Blog2014 (5) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be denied to the assessee in so far as it was nobodys case to foresee what was to be gained after the business assets have been used claiming deprecation alone makes the sale of assets which gain on the sale thereafter has to be as capital gains - Once the capital gains have been computed the consideration for their investment is to be in accordance with the provision of the Income Tax Act cannot be disregarded in so far as the provisions do not disallow claiming of deduction u/s 54 EC of the Act whether has to be first termed as long term capital assets and then the re-computation whether could be as short term capital gain for taxation purpose – Relying upon DCIT vs Himalaya Machinery (P) Ltd [2012 (12) TMI 607 - GUJARAT HIGH COURT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 54EC of the Act could not be claimed by the assessee because (a) the asset was not a long term capital asset and (b) it was a depreciable asset. Therefore, it was a short term capital asset to which the provisions of section 54EC of the Act did not apply. The learned Tribunal allowed the claim of the assessee on the basis of the following reasons : We have heard the rival contentions and carefully perused the material available on record. On a careful consideration of the facts and circumstances of the case we are inclined to agree with the provisions that the computation of capital gains as Long term capital gain cannot be denied to the assessee in so far as it was nobodys case to foresee what was to be gained after the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Mumbai Bench in ITA No.2296/Mumbai/2011 in the case of M/s. Jai Hind Rubber Products Pvt. Ltd. Vs ACIT when this legal fiction was addressed by following the decision of the Hon ble Gujarat High Court (supra).. Concluding we are of the considered view that the claim of deduction u/s 54EC of the Act was therefore rightly claimed by the assessee on the basis of the facts and figures brought on record by the AO which it was entitled to not because it was being claimed as form short terms assets. The order of the ld. CIT(A) is set aside and the AO is directed to accept the claim as returned by the assessee on this issue. Mr. Bag, appointed a Amicus Curie by us, submitted that the tax effect in this case is Rs.9,78,878/- which is below Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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