TMI Blog2013 (9) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... ve not been recovered till now. The assessee had, therefore, written off the amounts in the books of accounts. It is not cost effective to enforce recovery by filing suits. In our view, considering the smallness of amounts and the facts and circumstances of the case, claim has to be allowed as business loss. - IT Appeal No. 4004 (Mum.) of 2011 - - - Dated:- 17-9-2013 - Rajendra Singh (Accountant Member) And Amit Shukla (Judicial Member) For the Petitioner : Vijay Mehta, Sunil Hirawat For the Respondent : Ashutosh Rajhans ORDER Rajendra Singh (Accountant Member) This appeal by the assessee is directed against the order dated 25.3.2011 of CIT(A) for the assessment year 2006-07. The assessee in this appeal has raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, adopted the stamp duty value of ₹ 5927794/- as the sale consideration and computed the capital gain at ₹ 2427784/- which was treated as short term capital gain u/s 50 of the Income Tax Act. 2.1 The assessee disputed the decision of AO and submitted before CIT(A) that provisions of section 50C were not applicable in case of depreciable assets. CIT(A) however rejected the arguments advanced and confirmed the order of AO treating the stamp duty value as the sale value u/s 50C of the IT Act. Aggrieved by the decision of CIT(A) the assessee is in appeal before Tribunal in which the additional ground as mentioned earlier has also been raised regarding rate of tax to be applied in case of capital gain computed u/s 50 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of capital gain. He also referred to the decision of the Mumbai bench of Tribunal in case of Mahindra Freight Carriers v. Dy. CIT [2011] 129 ITD 278 in which it has been held that prescriptions of section 50 are to be extended only to stage of computation of capital gain and, therefore, capital gain resulting from transfer of depreciable asset which was held from more than period of three years would retain the character of long term capital gain for all other provisions of the Act and consequently qualify for set off against brought forward loss of long term capital gain. Reference was also made to another decision of Mumbai bench of Tribunal in case of Prabodh Investment Trading Co. v. ITO [IT Appeal No. 6557 (Mum) of 2008, dated 28- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO v. United Marine Academy [2011] 130 ITD 113. Therefore, we confirm the order of CIT (A) holding that the stamp duty value assessed by the stamp duty authorities is required to be adopted as sale consideration in case of sale of the flat under reference in this case. 2.5 The assessee has also raised an additional ground that for the purpose of application of tax rate, the capital gain in case of the assessee has to be assessed as long term capital gain as the flat had been held by the assessee for more than three years. It has been argued that provisions of section 50 deeming the capital gain as short term capital gain is only for the purposes of section 48 and 49 which relate to computation of capital gain. The deeming provisions has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain, the flat has to be treated as short term capital gain u/s 50 of the IT Act, but for the purpose of applicability of tax rate it has to be treated as long term capital gain if held for more than three years. We accordingly direct the AO to compute the capital gain from the sale of flat and apply the appropriate tax rate after necessary verification in the light of observations made in this order. 3. The second dispute is regarding addition of ₹ 59,373/- confirmed by the CIT(A) on account of bad debt. AO in the assessment order observed that the assessee had claimed deduction of ₹ 11,08,930/- on account of bad debt. AO also observed that any claim of bad debt cannot be allowed and the assessee has to establish that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htra Metal Distributors Ltd Rs. 3/- Total ₹ 59,373/- Aggrieved by the decision of CIT(A) the assessee is in appeal before Tribunal. 3.2 Before us the learned AR for the assessee submitted that the sum of ₹ 59,373/- which has been disallowed by CIT(A) as bad debt has to be considered as business loss as various amounts had been deposited/advanced to parties in connection with business. These amounts have not been recovered even till now and it was not cost effective to file legal cases for recovery of the amounts. The amounts have been written off in the books of accounts and, therefore, the same had to be allowed as business loss. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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