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2016 (7) TMI 1097 - AT - Income TaxDeduction u/s 54EC - short capital gain arising on sale of depreciable asset - Held that:- As decided in ITO V/s ACE Builders [2005 (3) TMI 36 - BOMBAY High Court ] the benefit of section 54E will be available to the assessee irrespective of the fact that the computation of capital gains is done either under sections 48 and 49 or under section 50. The contention of the revenue that by amendment to section 50, the long-term capital asset had been converted into to short-term capital asset was also without any merit. The legal fiction created by the statute is to deem the capital gain as short-term capital gain and not to deem the asset as short- term capital asset. Therefore, it cannot be said that section 50 converts long-term capital asset into a short-term capital asset Therefore, the Tribunal was justified in allowing the benefit of exemption under section 54E to the assessee in respect of the capital gains arising on the transfer of a capital asset on which depreciation had been allowed. - Decided in favour of assessee.
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