Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 270 - AT - Income TaxAddition on account of short term capital on sale of gala - Held that:- The factory gala sold by the assessee was part of the blocked assets in the business of the assessee who was engaged in the business of manufacturing of self adhesive labels and stickers. The said gala remained the part of the block of fixed assets of the assessee. However, the assessee did not claim and depreciation on the said gala because the same was given on rent during the 2 years i.e. AY 2007-08 and AY 2008-09. In the AY 2009-10 the said gala was sold and the sale proceeds in respect of the said gala was treated in accordance with the provisions of section 50 of the Act by reducing the said consideration from the block of asset pertaining to factory gala and no short term capital gain had resulted from the said sale as the WDV at the year end worked out at ₹ 29,33,290/- before depreciation and after taking opening WDV plus additions and sale during the year. We also find that the ld. AO treated the sale of gala as sale of short term asset and denied the benefit of blocked of assets u/s 43(6) and of special provisions u/s 50 for calculating capital gain in case of depreciable assets. The short term capital gain was calculated at ₹ 60,42,693/- by applying the provision of 50C of the Act. In our opinion the ld. CIT(A) had rightly reversed the action of AO by holding that sale of gala was part of relevant block of assets as per the provisions of section 43(6) and short term capital gain was to be computed in accordance with section 50 of the Act. Thus we do not find any infirmity in the order passed by the CIT(A). We, therefore, dismiss the appeal of the revenue by upholding the order of CIT(A). - Decided against revenue
|