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TMI Blog2022 (3) TMI 1508X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts and circumstances of the case. 11. The First Appellate Authority has erred in confirming the assessment order in respect of determining and treating a sum of Rs. 93,80,891/- as Short Term Capital Gains U/s. 50 of the Income Tax Act. 12. The Appellant reserves its liberty to file additional statement of facts / grounds of appeal at the time of hearing." 3. The assessee is engaged in the business of manufactures of drugs and pharmaceutical. The assesee filed its original return of income on 14/10/2010 and subsequently filed a revised return of income on 29/9/2010 declaring an income of Rs.1,03,05,662/-. The case was selected for scrutiny and the notice u/s 143(2) of the Incometax Act (the Act) was duly served on the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted before the AO that the sold property was part of block of assets as defined u/s 2(11) of the Act and that the assessee was claiming depreciation on the said building until the previous financial year. The assessee also submitted that during the year under consideration, no depreciation was claimed since the asset was not put to use for business purposes during the year. The assessee further submitted that, the assets continued to be part of the block of assets and therefore the sale value of the asset was rightly adjusted against the block of assets in accordance with sec. 32 8. The AO did not accept the submissions of the assessee and held that the sale proceeds of the said building cannot be adjusted against the block of assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered as part of the block and hence the sale value being adjusted against the said block is not correct. 13. We have heard the rival submissions and perused the materials on record. From the perusal of the depreciation schedule submitted by the assessee, it is clear that the assessee has shown (i) Factory Building, (ii) Building used for business purposes and (iii) Buildings let out under the same block of assets. So the first issue that needs to be considered is whether all these buildings are correctly grouped to be part of the block of assets. We will look at the provisions of section 2(11) which defines the term block of assets "(11) "block of assets" means a group of assets falling within a class of assets comprising- (a) tangi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- and that the value of the block is not exhausted after reducing the sale value of the building Dalamal Towers. The contention of the AO and CIT(A) that there is no depreciation asset appearing in the block is not correct basis the fact that the factory building belonging to the same block is a depreciable assets in the block. The fact that no depreciation is claimed during the year under consideration for the assets in the block viz., Dalamal Towers & Factory Building, does not remove the assets from the block. An asset gets removed from the block when the asset was sold or discarded or demolished or destroyed during the relevant previous year as provided in sections 43(6)(c)(i)(b) and 32(1)(iii) of the Act. The Apex Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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