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TMI Blog2013 (7) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee sold its factory premises during the year at a total consideration of Rs. 1,05,60,046. The assessee also purchased an apartment for total consideration of Rs. 89,06,394 and after adjusting the cost of new flat against the sale consideration of factory premises under section 50(1)(iii), the assessee computed short-term capital gain at Rs. 12,52,974. Relying on the definition of block of assets under section 2(11) of the Act and definition of written down value of block of assets under section 43(6) read with section 32(1), the Assessing Officer considered that the apartment purchased was a residential apartment on which depreciation was allowable at 5 per cent. Since factory building was eligible for depreciation at 10 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me is the office premises of the assessee. Further, it was also submitted that the Assessing Officer allowed depreciation of 10 per cent. on the said premises in the later years. Therefore, the findings of the authorities are not correct and the assessee was entitled to claim deduction. Learned counsel relied on the decision of the Income-tax Appellate Tribunal, Mumbai, in the case of Artic v. Asst. CIT [1999] 68 ITD 462 (Mum). The learned Departmental representative, however, referred to the provisions of the Act and relied on the findings of the authorities. 5. We have considered the issue and examined the rival contentions. As far as legal principles are concerned, the co-ordinate Bench in the case of Artic [1999] 68 ITD 462 (Mum), held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., capital gains. The rules relating to the computation of business income are not incorporated or worked into the rules relating to the computation of capital gains. Therefore, while examining the applicability of the provisions of section 50, the Tribunal is not to be influenced by the rules relating to the computation of the business income. Section 2(11) defines "block of assets" which does not speak of depreciation having been allowed in the assessments in respect of any asset falling within the block of assets but refers only to the depreciation rates being prescribed in the rules. Section 50 refers to a capital assets "forming part of a block of assets in respect of which depreciation has been allowed". This means that the asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concept was only to reduce time and effort spent in detailed record maintenance. While giving effect to this object, there could have been no justification or warrant for pre scribing a condition that the new asset, in addition to being an asset in respect of which the same rate of depreciation is prescribed as in the case of the other assets within the class, should also be used in a business carried on by the assessee. In the case of a building, the new building purchased should be one in respect of which the same rate of depreciation, as is prescribed in respect of the other buildings, has been prescribed by the rules. If the assessee carries on a business, in that case he would also be eligible for an allowance on account of depreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as office premises, there cannot be any objection for allowing depreciation at 10 per cent. Therefore, what is required to be examined is whether the assessee is using premises for office purposes. As seen from the appeal memo and address given as address of the assessee, it is D-4/95, Bharucha Baug, S.V. Road, Andheri which seems to be different from the property which the assessee purchased and claimed as office premises. The assessee purchased property in Akruti Arcade Park, Flat 804 on 8th Floor of the building in Wing-1. Therefore, this aspect whether the property is used as office premises requires examination by the Assessing Officer not only with reference to actual usage but also with reference to taxes paid to municipal authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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