Long term/short Term Capital Gain

[SITARAM AGRAWAL]

Sir,

Do needful in regard following query. I will use it as guide line/Opinion.

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. What is impact on Sec. 50 of the case law :

Commonwealth Trust Limited Versus Commissioner of Income-Tax  (1997 (7) TMI 14 - SUPREME Court)=(1997) 228 ITR 1 (SC)

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

Thanks

Sitaram Agrawal

AI Summary

Capital gains tax treatment clarified: bifurcate land and building for gains, claim Section 54 EC deductions on NABARD Bonds. A discussion on capital gains tax treatment for a firm that purchased premises in the assessment year 1977-78, claimed depreciation, and sold it in 2009-10. The query involves whether the asset can be divided into land and building for capital gains calculation, using different valuation dates for each. The response clarifies that land and building should be bifurcated for capital gain computation, with the building portion treated as short-term due to depreciation and the land as long-term. The taxpayer can claim deductions under section 54 EC for investments in NABARD Bonds, even for short-term gains if held for over three years. Certain case laws cited in the query were deemed irrelevant.