TMI Blog2011 (4) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of capital gain on such asset i.e. plant and machinery, building & staff quarters and other plant and machinery - whether assessee is entitled for benefit of section 54EC of the Act or not after giving due opportunity of hearing to assessee and after considering such evidences as may be filed before him - Appeal is allowed for statistical purpose - 609, 629 (KOL.) OF 2010 - - - Dated:- 13-4-2011 - B.R. MITTAL, C.D. RAO, JJ. A.K. Dutta for the Appellant. A.K. Pramanik for the Respondent. ORDER B.R. Mittal, Judicial Member. ‑ These are the cross-appeals one filed by assessee and the other filed by Revenue are preferred against the order of Ld. CIT(A)-XXXII, Kolkata dated, 27.11.2009 for assessment year 2006-07. 2. The assessee has taken following ground of appeal :‑ (1) The assessee sold naturally green trees as part of the sale proceeds of land for a sum of Rs. 2,00,000 and claimed the same as income from capital gain. Later on, in view of two judgments of Madras and P. H. High Court, it was claimed that the proceeds were non-taxable income. The A.O. held it to be business income and the CIT(A) held it to be income from the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from salary, income from profit or gains of business, capital gain, income from property and which is not excluded from the total income under the Act, shall be chargeable to Income-tax Act under the head "income from other sources". Ld. CIT(A) has held that the said income of 2,00,000 received by assessee on sale of trees is to be assessed under the head "income from other sources". Hence, assessee is in appeal before Tribunal. 7. During the course of hearing, Ld. Authorised Representative for the assessee made his submission on the lines of submissions made before the authorities below. Relying on the decision of Hon'ble Punjab Haryana High Court in the case of CIT v. Amrik Singh [2008] 299 ITR 141 and also the decision of Hon'ble Apex Court in the case of CIT v. B.C. Srinivasa Setty [1981] 128 ITR 2942 submitted that if an assessee acquires an asset without incurring any cost, capital gain could not be taxable. He further submitted that income arising on sale of trees has to be assessed under the head capital gain. 8. On the other hand, Ld. Departmental Representative supported the orders of the authorities below. He submitted that when assessee filed return, he did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t produced before Assessing Officer. Hence, assessee is in further appeal before the Tribunal. 12. At the time of hearing, Ld. Authorised Representative for the assessee filed copy of revised computation of income and stated that the same was also filed by assessee before the authorities below showing that assessee had received advances from Smt. Bharti Roy and Smt. Sutapa Sharma, daughter of Late S. Roy and assessee paid interest to them. Ld. Authorised Representative for the assessee submitted that Assessing Officer did not ask for confirmation and hence, the same were not filed before him. He submitted that the said two creditors advanced amount to assessee out of sale proceeds of land to which they were co-owner. Ld. Authorised Representative for the assessee submitted that if the matter is restored to Assessing Officer, assessee will furnish requisite details with documentary evidences of receipt of advances from Smt. Bharti Roy Smt. Sutapa Sharma on which interest was paid by assessee as claimed. 13. However, Ld. Departmental Representative in his submission relied on the orders of the authorities below. 14. We have carefully considered the submissions of Ld. Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery, building staff quarters and other plant and machinery. Being aggrieved, assessee filed appeal before Ld. CIT(A). 16. On behalf of assessee, it was contended that assessee had never enjoyed or claimed depreciation in respect of any of the assets sold by him. Therefore, provisions of section 50 of the Act are not attracted. Ld. CIT(A) accepted contention of assessee and held that assessee had rightly claimed capital gain on sale of assets viz. plant and machinery, building staff quarters and other plant and machinery as long term capital gain. Ld. CIT(A) has further held that assessee has invested the said capital gain in Bonds issued by NABARD and therefore, benefit of provisions of section 54EC of the Act is to be allowed to assessee. Hence, Department is in further appeal before Tribunal. 17. We have carefully considered the orders of Assessing Officer as well as Ld. CIT(A) and the contention of Ld. Representatives of both the parties. 18. We observe that assessee's stand is that assessee did not enjoy any depreciation in respect of plant and machinery, building staff quarters and other plant and machinery (all taken over from partnership firm) and hence, sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been inserted with effect from 1.4.2002, which provides that provisions of Sub-Section (1) shall apply, whether or not assessee has claimed deduction of depreciation in computing his total income. In other words, with effect from assessment year 2002-03, it will be deemed that depreciation has been allowed in respect of assets forming part of the block assets irrespective of the fact that assessee has claimed depreciation or not. Therefore, we are of the considered view that provisions of section 50 is applicable in respect of assets sold i.e. plant and machinery, building staff quarters and other plant and machinery by assessee in assessment year consideration. 21. Since the issue has not been considered by the authorities below in the light of Explanation 5, inserted by Finance Act, 2001, with effect from 1.4.2002, we are of the considered view that this issue be restored to the file of Assessing Officer with a direction to examine the issue in the light of our observations as mentioned hereinabove and decide capital gain arose to assessee and also consider as to whether assessee is entitled for benefit of section 54EC of the Act or not after giving due opportunity of hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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