TMI Blog2013 (5) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to claim of deduction of interest amounting to ₹ 64,750/- which is dismissed as not pressed. 3. The brief facts as have been brought on record and as narrated by the ld..counsel for the assessee are that : This is a reassessment case arising out of ITAT, Kolkata Order 13.4.2011 in case no.609/Kol/2010 and 629/Kol/2010. The issue before the AO was two : 1) Disalloance of claim of the assessee for deduction of interest. 2) Whether gain from Sale of depreciable fixed Assets would be short term or long term gain following the insertion of explanation 5 to Sec 32(i) with effect from 1.4.2002 and whether the assessee would be entitled to exemption u/s 54BC of the Act. The assessee made an investment of ₹ 60,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee thereafter held the consideration of the investment u/s 54EC as from Short Term Capital Gain amounting to ₹ 20,38,000/-for denying it. It was the very issue appealed against in so far as the very fact that the AO disallowed the depreciation whether can go back to the date of purchase of the assets for computing the depreciation was the direction given by the Tribunal was not considered in accordance with law by the AO. The ld. CIT(A) considered the applicability of the provision of section 50 in respect of this asset which formed part of block assets, the depreciation has been allowed under the Act when the excess of sale proceeds over and above written down value shall be deemed to be capital gains arising out of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Counsel for the assesse has submitted the decision of ITAT Mumbai Bench indicating that a conversion of Long Term Capital assets as Short Term capital asset cannot be without any merits. The legal fiction created by the statute is to deem the capital gain as short term capital gain and not to deem the asset as short term capital asset was the issue rendered in favour of the assesse, in so far as, the Tribunal in assessee s own case had directed, not as a matter of loud thinking, but as a matter of record that the claim of deduction u/s 54EC of the Act is to be applied after considering the claim in accordance with the provision of the Income Tax Act. He prayed that the income as was rendered by the assessee may be considered in accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission of the ld counsel for the assessee placing reliance on the decision of the Hon ble Gujarat High Court in the case of DCIT vs Himalaya Machinery (P) Ltd which copy has been placed on record wherein the applicability of the provision of section 54EC read with sections 50 and 48 of the I.T.Act was held in favour of the assessee in so far as it was undisputed the transfer was of long term capital assets, the exemption u/s 54EC is available, and the assets on which depreciation is allowed have been owned and used by the assessee for claiming depreciation therefore holding them as for short term capital gain would be done as provided u/s 50 of the Act by applying the provisions of sections 48 and 49 and would not disentitle the same from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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