Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 208 - AT - Income TaxShort term Capital gain / long term capital gain - separation of value of land and building, since depreciation claimed on building - application of the provisions of section 50C - transfer of leasehold rights in the plot of land allotted to the appellant assessee - rejection of claim of cost of construction - whether the provision of section 50C of the Act per se could be applied for transfer of lease hold rate possessed by the assessee? - HELD THAT:- As decided in M/s. Green Hotels and Estate Pvt. Ltd [2016 (12) TMI 353 - BOMBAY HIGH COURT] Section 50C is not applicable while computing capital gains on transfer of leasehold rights in land and buildings. Hence, we hold that the sale consideration of transfer of lease hold rate should be considered only Rs. 75 lakhs. Further, we find that the industrial plot of land has been allotted to the assessee on 30.03.2005. The assessee has been making super structure incurring cost of construction in FY 2006-07 onwards. The entire property has been sold by the assessee on 08.10.2009. Hence, the land taken on lease is hold by the assessee for more than 3 years and consequentially eligible for benefit of indexation thereon. Hence, the resultant gain arising on its transfer would be long term capital gain. The building taken by the assessee been held less than three years and deprecation is also claimed by the assessee thereon. Hence, the building taken would be determined based on dimming provision of section 50 of the Act. The facts of assessee incurring expenses towards cost of construction and claiming depreciation thereon is reflected in the financial statement of the assessee itself commencing from 2006-07, 2007-08 and 2008-09. Hence, there is no scope for rejection of claim of cost of construction. Disallowance of business expenses - Addition made as assessee has not carried on any business activity which is also evident from the profit and loss account whether sale or gross receipts shows at Rs. Nil. - HELD THAT:- As decided in Mokul Finance Pvt. Ltd. [2007 (7) TMI 351 - ITAT DELHI-I] unless there is some material on record to show that the assessee has completely abandoned the share dealing business, merely because there are no business transactions in the relevant previous year cannot be reason enough to come to the conclusion the business has come to an end. Assessee appeal allowed.
|