<h1>Supreme Court Rules Pre-1995 Sales of Depreciated Assets Not Taxable as Business Income; Post-1995 Subject to Capital Gains Tax.</h1> The Supreme Court addressed the taxability of income from the sale of fully depreciated assets costing less than Rs. 5,000, specifically bottles and crates used by a soft drink manufacturer. Prior to the 1988-89 assessment year, such sales were taxable under Section 41(2) of the Income Tax Act, 1961, as a balancing charge. However, post-1988, Section 41(2) was deleted, and these assets did not enter the 'block of assets' until after April 1, 1995. The Court ruled that profits from the sale of these assets purchased before March 31, 1995, were not taxable as business income under Sections 41(1) or 50. Assets purchased after April 1, 1995, were subject to capital gains tax under Section 50.