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2009 (7) TMI 5 - SC - Income TaxHead of Income – Balancing Charge - Sale of assets on which 100% depreciation claimed - Cost of assets less than Rs. 5000 – bottles and crates purchased prior to 31.3.1995 did not form part of the block of assets, hence, profits on sale of such assets were not taxable as a balancing charge, neither under Section 41(1) nor under Section 50. In respect of bottles and crates purchased after 1.4.1995, on account of deletion of proviso to Section 31(1)(ii) (vide Finance Act, 1995) such bottles and crates formed part of block of assets and consequently such assets purchased after 1.4.1995, in this case, became exigible to capital gains tax under Section 50 – However matter remitted to AO for small issue to find out whether earmarking “profits from sale of assets” as “miscellaneous income” has resulted in the understatement of net profits at the pre-Section 28 stage and taxable profits at post-Section 28 stage. In all other cases, sale proceeds have been earmarked as “profits on sale of assets” and in those cases, therefore, there is no question of verification by the A.O.
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