TMI Blog2015 (1) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... d to deduction under Section 54EC of the Act. It would be so entitled in respect of short term capital gain under under section 50 in respect of building portion, if the same was held for more than three years. There was nothing in section 50 to suggest that fiction created is not restricted in its application to sections 48 & 49, but to other provisions as well. Section itself makes it clear that the deeming fiction created in sub-sections 1 & 2 is restricted only to the mode of computation of capital gains contained in sections 48 & 49. Section 50 does not convert a long term capital asset into short term capital asset. - Decided in favour of assessee. - INCOME TAX APPEAL NO.1506 OF 2012 - - - Dated:- 14-11-2014 - S.C.DHARMADHIKARI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner was right in concluding that the bifurcation into two parts i.e. land and building is done only for the purposes of the Assessment Year in question namely 2001-02. Therefore, that was not permissible and the Tribunal should have considered as to whether the Commissioner was justified in the conclusion that he reached. Our attention is invited to the Commissioner's order in that regard. 4. Mr.Irani, appearing on behalf of the Assessee, on the other hand, submits that the questions as raised at page 4 cannot be termed as substantial questions of law. They have been answered in accordance with law laid by this Court and at least two decisions have been referred to by the Tribunal in that regard. Merely because the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and which came to Nil. With regard to the claim that the income has to be computed as generated from house property, the Assessing Officer held that the asset held by the Assessee as business asset, which was not let out and depreciation on which had been claimed. Therefore the order of the Assessing Officer resulted in disallowance of excess depreciation of ₹ 80 lakhs. He also observed that there was no Capital Gain and hence no question of allowing deduction under section 54EC arises. 6. With regard to other claims and which are factual the basic facts are set out in paras 3 3.4 of the Paper Book. 7. With regard to all the questions and most of which emanate from ground No.12 before the First Appellate Authority, the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the same and therefore capital gain has to be computed in respect of land separately as long term capital gain. The bifurcation of land and building into separate part for the purpose of capital gain may have been done in the Assessment Year in question, but that was permissible and in that regard the Tribunal relied upon the judgment of this Court in the case of CIT v.s. Citibank (261 ITR 570), hence the bifurcation as made ought not result in total denial of the claim is the conclusion reached. The Tribunal has referred to relevant facts in paras 8.3 and 8.4. It found that the gain in respect of land portion has to be computed as long terms capital gain and the Assessee has invested this gain in NABARD bonds. Therefore, it would be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the deeming fiction. The Tribunal, therefore, allowed the exemption under section 54E, that has been upheld by this Court. The Division Bench held that there was nothing in section 50 to suggest that fiction created is not restricted in its application to sections 48 49, but to other provisions as well. Section itself makes it clear that the deeming fiction created in sub-sections 1 2 is restricted only to the mode of computation of capital gains contained in sections 48 49. In other words, section 50 does not convert a long term capital asset into short term capital asset. Once this is the view taken by the Division Bench of this Court and which has been followed by the Tribunal in the present case, then we are of the view that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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