9911796707
TMI Blog2017 (9) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... in the first round of proceedings, the Ld. CIT(A) has condoned the said delay and has decided the issue on merits and as such, the impugned appeal is filed pertaining to assessment year 2007-08 on the following grounds:- 1. That the learned Commissioner of Income Tax (Appeals) has grossly erred in sustaining the short term capital gain assessed by AO at Rs. 72,81,594/- as against short term capital gain of Rs. 7,87,982/-, as declared by the appellant. 1.1 That in doing so, the ld. CIT (A) has arrived at the erroneous conclusion that the full value of consideration of Rs. 1.15 crores received by the appellant towards sale of its restaurant consisting of Building, Furniture and Fixtures (Rs 1,00,00,000) and Plant and Machinery (Rs 15,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Commissioner of Income Tax (Appeals) has erred in sustaining the addition uls 14A to the extent of 0.5% of the investment although no satisfaction had been recorded by the AO and the facts that the appellant had not incurred any expenses in relation to the exempt income. 3. That the Ld. CIT(A) has erred sustaining the levy of interest u/s. 234B and 234C of the Act. 2. The brief facts of the case are that the assessee company has sold during the year under consideration a running restaurant at commercial space B-247, Supermart-I, DLF Phase-IV, Gurgaon on "as is where is" basis including all interior work, civil work, electrical work, kitchen equipment, utensils, Furniture & Fixtures attached to the said premises for a sale consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. During the hearing, learned Counsel of Assessee, Sh. Salil Aggarwal, Advocate, summarized the issue and argued that the issue involved in the instant matter is with respect to interpretation of "class of assets" so included in the "block of assets" for the purposes of computation of capital gain. In simple words, the main thrust of the argument of learned counsel for assessee was that for the purposes of computation of capital gains in the case of depreciable asset under section 50 of the Act, the only condition is that the assets should fall in the same block and there is no requirement that the assets in the same block should also be of same nature or same class. 3.1 Ld. Counsel of the assessee further stated that the AO as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42A) of section 2, where the capital asset is an asset forming part of a block of assets in respect of which depreciation has been allowed under this Act or under the Indian Income-tax Act, 1922 (11 of 1922), the provisions of sections 48 and 49 shall be subject to the following modifications :- (1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capital asset falling within the block of the assets during the previous year, exceeds the aggregate of the following amounts, namely :- (i) expenditure incurred wholly and exclusively in connection with such transfer or trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible and within the same class, various block of assets are covered. In the instant case, on going through the order of learned CIT (A), it is observed that he has failed to appreciate the fact that section 2(11) of the Indian Income Tax Act, 1961 specifies as only two class of assets i.e. tangible and intangible assets and within these two classes of assets, assets having same rate of depreciation are prescribed and they fall within the same block. Whereas, the concept of an asset falling within the same block is driven by the same rate of depreciation once it falls in the same class of assets and namely there are only two classes of assetstangible assets and intangible assets. 5.2 In view of the above, I find that Ld. CIT (A) has comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res is also the same. Hence, I hold that addition of Rs. 77,81,594/- so sustained by Id. CIT (A) is wholly unwarranted in as much as same was based on complete misreading of the provisions so envisaged in section 2( 11) of the Income Tax Act and as such, appeal of assessee with respect to ground nos. 1 to 1.5 is allowed. 6. With regard to ground no. 2 the assessee is concerned, in this ground the assessee has challenged the disallowance so made under section 14A of the Act read with rule 8D amounting to Rs. 1,21,986/-. Now, in this regard, having heard the arguments of learned counsel of Assessee and learned DR, I hold that the said disallowance is unwarranted on the facts of the instant case, as the same was so made by AO without recordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
