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

Bifurcation of land and building: building portion treated as short term under section 50; land as long term.
Bifurcation into land and building is required where depreciation was claimed: the building portion's gain is to be computed as short term capital gain under section 50, and the land portion's gain as long term capital gain by the statutory method. Investment of long term capital gain in specified bonds can trigger deduction under section 54EC, and that deduction approach may extend to the short term gain on the building portion if the holding period condition is met, with the matter referred to the assessing officer.