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TMI Blog2014 (6) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... al asset that was held as a business asset and depreciation was claimed on it. Additional ground raised by the assessee, read as under : "The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that the tax on capital gain ought to have been charged at 20% and not at the normal tax rate." As the above additional ground remained undecided so allowing the Miscellaneous Application filed by the assessee, matter was recalled for that limited purpose. 2.Assessee-company is a notified person under the Special Court (Trial of Offences relating to transactions in securities) Act,1992 and part of Harshad Mehta Group. All its assets and bank accounts were attached and vested in the hands of the custodian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee before the Tribunal about applicable tax rate. At the time of hearing before us, Authorised Representative(AR)argued that if for the purpose of section 48 or 49 an asset is assessed in a particular manner even then for the purpose of calculating tax it has to be treated as Long Term Capital Assets, that AO should taxed the @ 20% instead of normal tax rate for the transaction in question. He relied upon matters of Smita Conductors Ltd.(ITA No. 4004/Mum/2011-AY 2006-07-dated 17.09.2013) and Prabodh Investment & Trading Company (ITA/6557/Mum/2008) decided by the Mumbai Tribunal. He also referred to the case of A.A. Builders Ltd.(281 ITR 410).Departmental Representative (DR) stated that provisions related with exemptions could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale value u/s 5CC 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 IT Act. X X X 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of computation of capital 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."
Respectfully, following the above order of the coordinating bench, we decide the effective ground of appeal raised by the assessee-company, in its favour.
As a result, appeal filed by the Assessee stands allowed.
Order pronounced in the open court on 26th,June, 2014. X X X X Extracts X X X X X X X X Extracts X X X X
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