9911796707
TMI Blog1976 (2) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... ear of account this building having become useless was demolished. The assessee spent a sum of Rs. 4,205 for the demolition and realised a value of Rs. 15,640 for the old materials sold. The Income-tax Officer computed profit under s.41(2) at Rs. 12,088 (Rs. 15,640-Rs. 3,352), and in so doing, did not allow the assessee's claim that the sum of Rs. 4,205 being demolition expenses should have been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery, plant or furniture became due." Accordingly where a building is sold, discarded, demolished or destroyed and the moneys payable in respect of the building together with the "amount of scrap value" exceed the written down value, as laid down in that section, the specified amount is brought to tax. The learned counsel for the assessee has contended that when a building is demolished the scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts. In the present case a building is demolished. The question of 'moneys payable' comes in only when the building itself fetches any money. For the purpose of computation of profit under s.41(2) of the 'money payable' where the building fetches some money is to be taken along with "the scrap value". We have to see what the scrap value is in the present case. In order to render a building i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for demolition is only what the purchaser has to spend to remove the remnants of the building sold from the assessee's premises. A part of the money paid by the purchaser goes only towards reimbursement to the assessee of what he spent on behalf of the purchaser. The decision in Raja Bai Nikkam vs. CIT(1) has no application here. This was a case where buses were sold and in no selling the buse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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