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

Capital gains treatment: bifurcate land as long term and depreciated building as short term for tax computation.
Land, being non depreciable, is to be treated as Long Term Capital Gain and may avail long term tax benefits; the building, having attracted depreciation and reflected in written down value, is a depreciable component subject to Short Term Capital Gain treatment to the extent depreciation was claimed, in view of the operation of Section 50 from the stated statutory date and authority recognising bifurcation of consideration between land and building.