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2017 (5) TMI 369 - HC - Income TaxAllowability of loss claimed by the assessee on sale of foreign cars - Whether the Tribunal is right in holding that the foreign cars can be treated as capital asset of the assessee and any profit or loss arising of such cars can only be treated as capital gain or loss? - Held that:- In the present case, the foreign cars do not form part of a block of assets and, admittedly, have not been granted depreciation in so far as depreciation was not allowable in respect of foreign cars for the relevant period. The provisions of section 50 of the Act are thus inapplicable to the present case. The assessee sold the foreign cars and the sale consideration resulted in a loss of an amount of ₹ 51,6,108/-. Such loss has been written off in the books of accounts and claimed as a business loss. The extent of depreciation that could have been claimed would be the amount, by which the sale consideration falls short of the written down value. In the present case, ₹ 51,6,108/-, the written down value as defined under section 43(6), would mean actual cost less depreciation actually allowed. In the present case, since no depreciation was allowed, the written down value would equal the actual cost. The loss suffered by the assessee on the sale of foreign is quantified at a figure of ₹ 51,6,108/-. The only question that remains is to determine the nature of loss. In view of the categoric finding of the Commissioner of Income Tax (Appeals) that has attained finality, to the effect that the foreign cars were utilized in the business of the assessee, the loss arising out of their sale would be liable to be categorized as a business loss. - Decided in favour of assessee.
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