TMI Blog2022 (3) TMI 1508X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the same rate of depreciation is prescribed, constitute one block of asset. In assessee s case, the let out building against which no depreciation is claimed i.e. the building with NIL depreciation is grouped under the block. The income from letting out of these buildings is already assessed as income from house property against which statutory deduction u/s 24 is already allowed. Hence in our considered view buildings that are let out cannot be part of the block of assets as defined u/s.2(11) of the Act. The asset other than the asset sold in the block is the Factory Building . The rate of depreciation for factory building is same as that of the other building used for the purpose of the business and the factory building belongs t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NT MEMBER For the Assessee : Shri Harish V.S, Advocate For the Revenue : Shri Sankar Ganesh D, JCIT(DR) ORDER Per Padmavathy S, Accountant Member This appeal of the assessee is directed against the order of CIT(A) 4, Bengaluru dated 12/1/2016 passed for the assessment year 2010-11. 2. The assessee has raised the following grounds:- 9. The impugned order is bad in Law. 10. The impugned order is contrary and opposed to the facts and circumstances of the case. 11. The First Appellate Authority has erred in confirming the assessment order in respect of determining and treating a sum of Rs. 93,80,891/- as Short Term Capital Gains U/s. 50 of the Income Tax Act. 12. The Appellant reserves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demerger, the assessee did not have any business in Mumbai and there was no necessity to keep the building. Hence during the relevant assessment year, the assessee sold the building at Dalamal Towers at Mumbai for a sale consideration of Rs.95,00,000/- from the block of assets. The AO during the course of hearing, found that the assessee has claimed the profit earning of sale of fixed assets as deduction from the total business income and asked for further details. The assessee submitted before the AO that the sold property was part of block of assets as defined u/s 2(11) of the Act and that the assessee was claiming depreciation on the said building until the previous financial year. The assessee also submitted that during the year under c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emaining value of the assets in the block is not exhausted and hence the assessee adjusted the sale value of the asset against the block as per the provisions of section 32 of the Act. 12. The Ld DR supported the decision of the lower authorities and argued that as per the provisions of section 2(11) the assets to be part of the same block should be same class of assets chargeable with same percentage of depreciation. The Ld DR submitted that the buildings that are rented out are also being considered as part of the block and hence the sale value being adjusted against the said block is not correct. 13. We have heard the rival submissions and perused the materials on record. From the perusal of the depreciation schedule submitted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The asset other than the asset sold in the block is the Factory Building . The rate of depreciation for factory building is same as that of the other building used for the purpose of the business and the factory building belongs to the same class of asset. Therefore it is correct to group the factory building as forming part of the block of assets along with other building used for the purpose of business. In the fixed asset schedule submitted, we notice that that the value of the factory building is Rs.169,333,730/- and that the value of the block is not exhausted after reducing the sale value of the building Dalamal Towers. The contention of the AO and CIT(A) that there is no depreciation asset appearing in the block is not correct basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo of the assets in one or two years not used for business purposes disentitles the assessee for depreciation for those years. In our view instead of selling the building, if the assessee started using the building after two years for business purposes the assessee can continue to claim depreciation based on the written down value available as on the date of ending of the previous year in which deprecation was allowed last. 16. Considering the facts that the value of the block of asset under the class of assets Building is more than the sale value of building Dalamal Towers, we hold that the assessee is right in reducing the sale value of the building from the value of the block of assets u/s.32 of the Act and that no short term cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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