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TMI Blog2017 (8) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by 89 days and assessee has filed affidavit along with application for condonation of delay stating the reason as under: - "2. Appellate order was received by me on 06-09-2016 and appeal against the same was required to be filled before Honorable tribunal on or before 5th November, 2016 I being a layman entrusted the work of filing appeal to my Chartered Accountant and genuinely believed that he would do the necessary paper work for filing the appeal in due course and within the time prescribed. 4. I am informed by my Chartered Accountant that he was busy due to enormous work pressure (a) on account of Income Disclosure Scheme 2016 till 30 September 2016 and (b) thereafter on account of tax audit assignments till 17' October 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as "Ld. CIT(A)"] has erred in upholding the order of the Ld. Assessing Officer and treating the long Term capital Gain on sale of capital asset as short term Capital Gain and making addition 12,47,074/- to the total income." 5. The facts relating to this issue are that the assessee sold shop at Mulund for a total consideration of Rs. 25 lakhs. The assessee declared long term capital gain as the property was purchased on 02-06-2003 at a total cost of Rs. 12,28,670/-. The assessee computed the long term capital gain and declared in the return of income. According to AO, this shop is forming part of block of assets and accordingly, he invoked the provisions of section 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per rule 5(I) of the Income Tax Rules and appendix thereto building used for the purpose of business and furniture and fittings are entitled to depreciation @10%. There are no furniture and fixtures in the Schedule of fixed assets of the appellant. Thus in the present case the shop would in itself constitute a block of asset. Thus in this case the entire block of asset being tangible asset, on which depreciation is allowable 10% has ceased to exist after the sale of the shop, therefore provisions of section 50(2) are attracted, and therefore the Ld. AO has correctly computed the income from sale of the shop as Short term capital Gain. Hence the action of the Ld. AO of taxing the sale proceeds of the shop as Short term capital Gain as per p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'short term capital gain'. As per S.2(42A) of Act states, unless the context otherwise requires, the term 'short-term capital asset" means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer. The AO was of the view that it is a business asset and forming pan of block of assets, sale consideration of asset (shop) cannot be treated as long term capital gains arising out of sale of long term capital asset and held that it is to be treated as short term capital gain in terms of section 50 of the Act. Considering this AO proceeded to treat the income from capital gains arising out of sale of asset (shop) as short term capital gain in terms of Section 50 of the Act. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed the same as assessable as long term capital gain. The plant and machinery was acquired partly in the financial year 1997-98 and partly in the year 1998-99. The assessee contended that as the plant and machinery was not in use, the assessee had not claimed depreciation The AO held that the section 50 of the Act is applicable hence assessable as short term capital gain. The CIT(A) also confirmed the order of Assessing Officer On appeal to the Tribunal, the Tribunal held that section 50 of the Act did not apply and plant and machinery which was not in use had to be regarded as long term capital gain. On appeal by revenue the Court held that once Tribunal had recorded a finding of fact that plant and machinery, which is covered by secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 54E of the Act will be available to the assessee irrespective of the fact that the computation of capital gains is done either under sections 48 & 49 or under section 50 of the Act. The contention of the revenue that by amendment to section 50 of the Act the long term capital asset has been converted into to short term capital asset is also without any merit. Therefore, it cannot be said that section 50 of the Act converts long term capital asset into a short term capital asset. 8. Based on the above facts and decision, even though depreciation is claimed the asset is considered as Long term capital asset and also exemption was granted. But the fact ultimately remains the same that asset is Long term capital asset. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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