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2010 (10) TMI 731 - AT - Income TaxSlump sale - short term capital gain - preconstruction period expenses - Depreciation - whether depreciation for the previous year not claimed by the assessee has to be mandatorily allowed for making the computations of profits arising out of slump sales - Held that:- In the absence of depreciation having been claimed and actually allowed by the Assessing Officer for assessment year 2000-01, it is not possible for the Assessing Officer to reduce notional depreciation that could have been allowable for assessment year 2000-01 to arrive at written down value of depreciable asset transferred by way of slump sale, while calculating the net worth of the undertaking. - if depreciation had been allowed in the assessment year 2000-01, the same would have been carried forward as unabsorbed depreciation and would have been set off against short term capital gains on slump sale of the undertaking. - the Assessing Officer/C.I.T.(A) erred in not accepting the computation of short term capital gains on slump sale of the undertaking and in seeking to reduce depreciation that could have been allowable for assessment year 2000-01, but had not been claimed or actually allowed in the assessment for that year. - Decided in favor of assessee. Pre-operative expenses in the previous year - do not agree with the contention of the assessee that this pre-operative expenses were otherwise includible under the head misc. expenditure and in that view such preoperative expenditure forming part of the undertaking transferred by way of slump sales were liable to be reduced as part of the net worth of the undertaking. We are of the considered opinion that the misc. expenditures cannot tantamount to any assets having any worth and hence, taking the same into account while computing capital gains u/s 50B is not tenable. But this aspect is only of academic interest as we have already held that this aspect pertaining to earlier assessment year and cannot be raked up in current assessment year - Decided in favour of assessee.
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