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2013 (7) TMI 873 - AT - Income TaxDepreciable assets - adjustment of the cost of new flat against the sale consideration of factory premises under section 50(1)(iii) - scope of block of assets under section 2(11) - Held that:- Assessee would be entitled to claim set off of cost of new asset acquired in the previous year, even if the assessee was not carrying on the same business or the other business. - assessee has not stopped business, therefore, as rightly held by the co-ordinate Bench the assessee is entitled for deduction under section 50(1)(iii) if the new asset is falling under same block of assets. Even though the property may be situated in residential premises, the same if used as office premises, there cannot be any objection for allowing depreciation at 10 per cent. Therefore, what is required to be examined is whether the assessee is using premises for office purposes. - property is used as office premises, the depreciation allowable is at 10 per cent. Therefore, the said asset falls in the same block of asset for deduction under section 50(1)(iii). In that case the written down value of the business premises may become zero, if the adjustment sought by the assessee was allowed in the computation of capital gains. This aspect required to be considered while working capital gains. Consequential adjustment for allowance of depreciation in later year(s) may require modification. In case the property is not used as office premises, the assessee may not be entitled for depreciation, unless asset is used for business purposes. This aspect also requires examination. Therefore, in the interest of justice we restore the matter to the file of the Assessing Officer to examine the exact usage of the property purchased and then work out capital gains/depreciation accordingly - Matter remanded back - Decided in favour of assessee.
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