TaxTMI 
TaxTMI 
2010 (1) TMI 659
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....rs prior to the previous year in which the building was sold. We have heard senior standing counsel appearing for the Revenue and Sri P. Balakrishnan, counsel appearing for the respondent-assessee. 2. The facts leading to the controversy are the following. The respondent-assessee is a firm which was engaged in business with the principal place of business at Kochi and a branch at Mumbai. The assessee purchased a flat at a cost of Rs. 95,000 in Mumbai for business purposes in the financial year ending on March 31, 1974. Since purchase of the flat, it was used as branch office of the assessee at Mumbai and on the capitalised cost of the building at Rs. 95,000 the assessee claimed depreciation and the same was allowed until the asses....
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....epreciable asset and was being used for business purposes, sale of the same attracts tax on short-term capital gains under section 50 of the Act. On second appeal filed by the assessee, the Tribunal solely relying on the entry in the balance-sheet of the assessee wherein the flat of the assessee at Mumbai was shown as investment, held that since the item was purchased in 1974, sale of the flat is assessable as long-term capital gains. It is against this order of the Tribunal that the Revenue has filed this appeal. 3. Senior counsel appearing for the Revenue contended that the Tribunal's findings are factually and legally incorrect. Before proceeding to decide the case on the merits, we feel the factual controversy as to whether af....
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....Act, 1922 (11 of 1922), the provisions of sections 48 and 49 shall be subject to the following modifications :- (1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capital asset falling within the block of the assets during the previous year, exceeds the aggregate of the following amounts, namely :- (i) expenditure incurred wholly and exclusively in connection with such transfer or transfers ; (ii) the written down value of the block of assets at the beginning of the previous year ; and (iii) the actual cost of any asset falling within....
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.... is that unless the asset sold forms part of the block asset in the previous year in which sale took place, it cannot be assessed to short-term capital gains under section 50 of the Act. In our view section 50 has to be understood with reference to the general scheme of assessment on sale of capital assets. The scheme of the Act is to categorise assets between short-term capital assets and long-term capital assets. Section 2(42A) defines short-term capital asset as an asset held for not more than 36 months. The non obstante clause with which section 50 opens makes it clear that it is an exception to the definition of short-term capital asset which means that even though the duration of holding of an asset is more than the period mentioned i....
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....on of the written down value of the asset in respect of which depreciation was claimed in any year as defined under section 43(6) of the Act towards cost of acquisition within the meaning of sections 48 and 49 of the Act. The condition for computation of short-term capital gains in the way it is stated in section 50A is that the assessee should have been allowed depreciation in respect of a depreciable asset sold in any previous year which obvious means that for the purpose of assessment of profit on the sale of a depreciable asset, the assessee need not have claimed depreciation continuously for the entire period upto the date of sale of the asset. In other words, in our view, the building which was acquired by the assessee in 1974 and in ....