Sec 50- Long Term Capital Gain-Short Term Capital Gain

[SITARAM AGRAWAL]

1. Firm Purchased Premises in A.Y. 1977-78. Claimed Depreciation. Sold it in A.Y.2009-10
2. Can I divide the said Asset in Land & Building seperately

As decided by the Bombay High Court :

Commr. Of IT Vs. Citi Bank N.A. dt. 23-04-2003

261 ITR 570 , 134 Taxmann 467

      3. Can I substitute Value as on 01-04-1981 for Land for consideration of Long      Term Capital Gain  and Value as on 01-04-1988 for Building for consideration of Short Term Capital Gain. Being Sec. 50 has given effect

            w.e.f. 01-04-1988

      4.   Any other view or Case Law for above fact.

            Thanks

Sitaram Agrawal

AI Summary

Asset Sale: Land and Building Tax Treatment Clarified; Land is Long-Term, Building is Short-Term Capital Gain A firm purchased premises in the assessment year 1977-78 and claimed depreciation. Upon selling the asset in 2009-10, the query was whether the asset could be divided into land and building for capital gains purposes. The discussion referenced a Bombay High Court decision and asked if values from 1981 for land and 1988 for the building could be used for calculating gains. The response clarified that land is not depreciable and should be treated as a long-term capital gain, while the building, being depreciable, should be treated as a short-term capital gain.