TMI Blog2010 (8) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by ld. Counsel appearing on behalf of assessee that assessee in the proceeding years has no long term capital gain - even if the long - term capital loss arises to the assessee during the year, no benefit accrues to the assessee in the proceeding years as long term capital loss can be adjusted against long term capital gain only - Revenue appeal is dismissed and assessee’s appeal is partly allowed - ITA NOS. 1450 & 1514 (DELHI) OF 2001 - - - Dated:- 31-8-2010 - G.E. VEERABHADRAPPA, VICE-PRESIDENT AND I.P. BANSAL, JUDICIAL MEMBER Maneesh Bahuguna for the Appellant. S.K. Chadha for the Respondent. ORDER PER I.P. BANSAL, J.M. These are cross appeals directed against the order of CIT(A) dated 02.02.01 for A.Y. 1997-98. Grounds of appeal in revenue s appeal read as under: - On the facts and in the circumstances of the case ld. CIT(A) is not right in holding that part of the cold storage building is liable to long term capital gains. Same piece of land cannot be divided. Capital Gains on Land and building is to be taken together as per the provisions of sec. 50 of the I.T. Act. Land becomes an integral part of the build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .72 25,733.96 10,162.76 Furniture 871.45 655.54 215.91 Electric Fittings 2,186.81 1,485.02 701.79 Library 94.65 - 94.65 Total (Rs.) 3,19,551.57 2,00,729.16 1,18,822.41 Previous Year 3,19,551.57 2,00,729.16 1,18,822.41 3. The assessee computed the capital gain on such sale as under: - Kapursco Cold Storage Pvt. Ltd. Assessment year 1997-98 Annexure - Computation of Capital Gains (A) Short Term Capital Gain Sales consideration of all depreciable assets other than land, listed in the enclosed Balance Sheet : (As per Sale Deed dated 28-8-1996) 50,000 Less: - Written Down Value of all depreciable assets other than land assets as per Annexure A to Balance Sheet) 1,18,822 Less: Land as on 1-4-1996 20,625 98,197 Short Term Capital Loss : 48,197 (B) Long Term Capital Gain Particulars of assets transferred : Land at Khasra No. 265/3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assets including cost of land as per schedule of fixed assets as at the beginning of the previous year. Rs. 1,18,822 /- Balance short term capital gains. Rs. 29,13,978 /- 5. Ld. CIT(A) has held that entire land could not be said to have attached with the building and whatever land was occupied by the building could only be treated as part of the building and in this manner he has excluded 8,175 sq. yds. out of total land of 9,783 sq. yds. and he has held that land measuring 1,640 sq. yds. being land occupied by the building has to be considered part of the building and thus, liable for short term capital gain. The department in its appeal is aggrieved by the decision of ld. CIT(A) vide which he has excluded the land from computation of short term capital gain of 8,175 sq. yds. The assessee in its appeal is aggrieved by the decision of ld. CIT(A) vide which it has been held that the land which was occupying the building became part of the building hence sec. 50 was not applicable. According to assessee, sec. 50 could not be applied to any part of the land. 6. Therefore, the short issues involved in both these appeals is regarding applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a separate asset. It is observed that even for the purposes of sec. 32, a building which is entitled for depreciation would mean only super structure and would not include the site. Referring to the scheme of the Act containing the provisions, regarding capital gain, it was observed that there cannot be any dispute that land is a capital asset and, therefore, it is liable to tax and if the price of two capital asses has been charged at one consolidated price, then the assessee is entitled to bifurcate the same. It will be relevant if the following observations are reproduced from the said decision: - Land is a capital asset in terms of sec. 2(14) of the Act and, in accordance with the scheme of the Act, it is treated as a separate asset. Even for the purpose of sec. 32, a building which is entitled for depreciation would mean only the superstructure and would not include the site. Under section 48 of the Act, the income chargeable under the head Capital gains has to be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset in the manner provided in this section. It is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50. Therefore, the appeal filed by the revenue to that extent is dismissed. 11. Now coming to the second issue which relates to whether the allocation made by the assessee to the super structure and other items of a sum of Rs. 50,000/- only is sufficient. Both of the parties were heard on this issue. The investment made by the assessee in the super structure and the other equipments is very old. Since F.Y. 1975-76 the same has not been used. For the purpose of computing long term capital gain the assessee has relied upon the valuation obtained by it from a registered valuer who has valued the asset as on 01.04.1981 vide report dated 22nd May, 1993. This valuation has been obtained by the assessee much prior to the date of sale. Ld. AR of the assessee stated before us that this was got prepared as in that year the assessee was thinking to dispose off the said property. In the said valuation the value of super structure has been arrived at by valuer at Rs. 5,22,310/- and after allowing the benefit of depreciation of Rs. 2,08,924/-, the depreciated value as on 01.04.1981/- has been arrived at Rs. 3,13,386/- 12. Keeping in view such position, we estimat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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