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2014 (10) TMI 325 - ITAT HYDERABADLoss on sale of machinery disallowed u/s 14A - Whether the purchase of plant & machinery is under revenue field and therefore the loss arising from the sale of the same would constitute the revenue loss – According to the assessee, he had not used the plant & machinery for his business but had sold that as "scrap". - Held that:- the sale of such plant & machinery which was purchased along with the building but found to be unfit for use still to be sale of capital asset and not stock in trade - the loss arising from sale of plant & machinery would constitute capital loss As the assessee has stated that the plant and machinery has never been used in the hotel right from the beginning, such plant & machinery cannot be considered as part of the block of asset of the assessee's business. The argument of the assessee that the purchases of plant & machinery alone is solitary transaction in the nature of adventure in trade cannot be accepted - The sale by the official liquidator is for the entirety of land, building and plant & machinery and all of them would constitute capital asset in the hands of the assessee in his business of running a hotel - the argument that the plant & machinery purchased would constitute stock in trade is acceptable and the loss on sale should be assessed as capital loss – Decided in favour of revenue.
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