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2010 (11) TMI 535 - AT - Income TaxExemption u/s 54EC - Sale of land - Long term capital gain or not - Find that assessee has produced valuation report at the time of purchase as well as sale. In Remand, Assessing Officer has not pointed out any lacunae in the same - Moreover, the cost of land so bifurcated was being already reflected in the books of accounts and no depreciation was claimed on that account - In the case of C.I.T. vs. D.C. Ramachandra Rao [1997 -TMI - 16361 - MADRAS High Court], Hon'ble Madras High Court has held that it is possible to bifurcate the capital gain arising out of sell of land and building, even if, they are sold as one unit - Land is an independent and identifiable capital asset and it continues to remain so, even after construction of building thereon - It was further held that land held by the assessee for a period exceeding 36 months - building constructed later and held by the assessee for a shorter period, land cannot be treated as short term capital assets - Hence, do not find any infirmity in the Ld. Commissioner of Income Tax (Appeals)'s order accepting long term capital gain arising out of the sale of land. Hence, there is also no infirmity in Ld. Commissioner of Income Tax (Appeals)'s directions to allow exemption u/s 54EC - Thus, the appeal of the revenue is dismissed.
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