Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (12) TMI 384 - AT - Income TaxCapital gain - rate of tax - rate of tax on capital gains from sale of depreciable assets - The assessee has relied on the decision of Ace Builders (P) Limited v/s ACIT, (2005 -TMI - 9448 - BOMBAY High Court ) and considered capital gains in respect of depreciable assets computed under section 50 as Long term capital gains instead of Short terms capital gains - the learned Counsel relied on the wordings in section 54EC, and submitted that the legislature used the words "where the capital gains arises from the transfer of a long term capital assets" and submitted that similar wordings has been used in section 74, as well as in section 112 - Held that: that the excess in question shall be deemed to be the capital gains arising from the transfer of a short term capital asset. Both the section 54EC and section 74, do not speak about short term capital gain or long term capital gain - Decided against the assessee. Regarding exemption under section 54EC - The assessee has invested an amount of Rs.2,13,30,000, in capital gain bonds issued by NABARD which is eligible for exemption under section 54EC - A.O. negated this contention and held that provisions of Section 54EC cannot be applied to actual long term capital gains deemed to be short term capital gains under the deeming provision of Section 50 and, therefore, denied the exemption under Section 54EC and assessed the entire gain of Rs 62,25.38 as short term capital gains - held that:- Respectfully following decision of the Jurisdictional High Court in in the case of Ace Builders (2005 -TMI - 9448 - BOMBAY High Court), I delete the addition of deemed short term capital gains of Rs.62,25,381, made in the assessment order and allow the appellant to appropriate like amount out of its investments of Rs 2,13,30,000 in NABARD bonds and allow the balance investment of Rs 1,51.04,619 against other long term capital gains during this year. - Appeal is allowed Regarding applicability of concessional rate under section 112 to LTCG deemed STCG under provisions of Section 50 - in principle, the assessee should be entitled to exemption under section 54EC, on gains earned on transfer of long term capital assets though they are depreciable assets - Appeal is allowed by way of remand to AO for de novo decision
|