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2022 (9) TMI 1242 - AT - Income TaxRate of tax - 20% or 30% - share of depreciable assets - applicability of section 50 - use of assets more than thee years / long term assets - HELD THAT:- Provisions of section 50 of the Act provides for procedure for computation of capital gains in case of transfer of capital asset which forms part of block of assets and in respect of which depreciation has been allowed under the Act. Therefore, only for this limited purpose, the capital gains arising from transfer of the assets, as covered in section 50 of the Act, is treated as capital gains arising from transfer of short term capital assets. Further, section 50 of the Act also clarifies that the same is restricted for the purpose of provisions of section 48 and 49 of the Act which, inter–alia, deals with mode of computation of capital gains. We find that similar issue arose for consideration before the Co–ordinate Bench of the Tribunal in Smita Conductors Ltd. (2013 (9) TMI 1056 - ITAT MUMBAI] wherein it was held that even in case where capital gain has been computed under section 50 of the Act, tax rate applicable will be the rate in respect of the long term capital gain in respect of property held for more than three years. Section 50 of the Act, which is a special provision for computing the capital gains in the case of depreciable assets, is not only restricted for the purposes of Section 48 or Section 49 of the Act as specifically stated therein and the said fiction created in sub–section (1) & (2) of Section 50 has limited application only in the context of mode of computation of capital gains contained in Section 48 and 49. See V.S. DEMPO COMPANY LTD. [2016 (10) TMI 62 - SUPREME COURT] In the present case, it is not the plea of the Revenue that the property from which the capital gains arose was held by the assessee for less than three years. The Assessing Officer only by application of provisions of section 50 of the Act treated the gains as arisen from transfer of short term capital asset and hence applied the rate of tax @ 30% as applicable in case of short term capital gain. Therefore, respectfully following the aforesaid judicial precedents, we find no infirmity in the impugned order passed by the learned CIT(A). As a result, grounds raised by the Revenue are dismissed.
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