2005 (3) TMI 36 - BOMBAY HIGH COURT

Capital gain - "Whether Tribunal was right in law in holding that the assessee is entitled to deduction under section 54E in respect of the capital gain arising on the transfer of a capital asset on which depreciation has been allowed and which is deemed as short-term capital gain under section 50 of the Income-tax Act, 1961?" - we concur with the decision of the Gauhati High Court in the case of CIT v. Assam Petroleum Industries (P.) Ltd. and hold that 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 has been allowed. Accordingly, the appeal fails. The substantial question of law raised by the Revenue is answered in the affirmative, i.e., in favour of the assessee and against the Revenue