TMI Blog2021 (4) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed depreciation on the property sold as Lunkard Sky Max of 17 units in AYs 2010-11 and 2011-12. But from AY 2012-13 i.e. Financial Year 2011-12 out of 17 units 7 units were given on rent and accordingly rental income was shown as income from house property and no depreciation was claimed on this property. We noted that this issue has been decided by Co-ordinate Bench of Mumbai in the case of M/s Prabodh Investment Trading Company Pvt. Ltd [ 2011 (2) TMI 1433 - ITAT MUMBAI ] as held if no depreciation had been claimed or allowed in respect of the asset, even though for an earlier period depreciation was claimed and allowed, from the year in which the depreciation claimed was discontinued, the asset would cease to be a business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the route of the matter. The relevant ground raised read as under: - 1. The Ld. CIT(A) as well Assessing Officer failed to appreciate the computation of capital gain to be made under sec. 50 of the Act i.e. on Sale of any asset falling in the block of assets, the same has to be reduced for the WDV of the said block of Asset any not from the individual asset as done by Assessing Officer. 2. The Ld. CIT(A) as well Assessing Officer failed to appreciate that under section 50 of the Act the STCG arises only when the status of the block is negative. 3. When these facts were confronted that the above ground relates to computation of capital gains under section 50C of the Act, this is purely a legal ground and goes to the route o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these 17 units since Financial Year 2011-12. But the Assessing Officer treated the gain on sale of these units as short term capital gain under section 50C of the Act and computed the capital gain as ₹ 63,93,920/- by observing in Para 3.5 as under : - 3.5 Considering the above mentioned facts, as assessee has claimed depreciation till 31.03.2011 @ 10% on this property. Hence, WDV of the property of ₹ 26,06,080/- {1,27,86,502 X 39/191.35} as on 31.03.2011 shall be the cost of acquisition of the said property for the purpose of calculation of Capital Gain thereon and as the asset is a depreciable asset, hence the nature of Capital Gain will be Short Term Capital Gain rather than Long Term Capital Gain . Penalty proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold as Lunkard Sky Max of 17 units in AYs 2010-11 and 2011-12. But from AY 2012-13 i.e. Financial Year 2011-12 out of 17 units 7 units were given on rent and accordingly rental income was shown as income from house property and no depreciation was claimed on this property. As argued by the learned Counsel for the assessee that once the property let out it loses its character as a business asset and no depreciation was allowable on it. This fact has not been denied by the Revenue. We noted that this issue has been decided by Co-ordinate Bench of Mumbai in the case of M/s Prabodh Investment Trading Company Pvt. Ltd. vs. ITO in ITA NO. 6557/Mum/2008, wherein it is held as under: 7. The next contention of the assessee is the one based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that but for the difference in the cost of acquisition, a past claim of depreciation does not change the character of the asset as such. This order of the Tribunal supports the assessee s case before us. In the present case also the assessee had stopped claiming depreciation in the income tax return for the assessment years 1992-93 and 1993-94. It had claimed depreciation in respect of the flat only in the assessment years 1990-91 and 1991-92. For the assessment year 1994-95 and all subsequent years the assessee had made a Note in its accounts filed with the returns clarifying that no depreciation was provided in respect of the flat as the same was not used during the year for the purpose of the business. From the assessment year 1994-95 up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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