AI Drafter 
TaxTMI 
TaxTMI 
2015 (3) TMI 1299
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....are wrong and are contrary to the provisions of the Income Tax Act, 1961 and rules made there under. 3.The Learned CIT(A) has further grossly erred in confirming the charging of interest u/s.220(2) of Rs. 10,60,465/- from 7th October, 1997 which is totally wrong instead of order u/s. 143(3) r.w.s.263 passed on30-1 1-2011 and the reasons assigned by him in doing so are wrong and are contrary to the provisions of the Income Tax Act, 1961 and rules made there under. 4.The appellant craves leave to add, amend or alter any of the above grounds on or before the date of hearing of the appeal. 5.All the aforesaid grounds of appeal are independent, in the alternative and without prejudice to one another. Vide its letter,dated .04.08.2014,the assessee has raised following additional ground of appeal: i.)Without prejudice and in any event, learned Assessing Officer [AO] be directed to apply the rate of tax applicable to long term capital gains instead of short term gains while computing capital gains tax liability concerning depreciable assets adverted to in original ground no 1. ii.)Appellant craves leave to add to and/or amend and/or modify and/or alter and/or ....
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.... In view of those facts, the CIT-7 Mumbai passed order u/s.263 on 01.02.2011 with direction to the AO to adopt the WDV of the depreciable asset as cost of acquisition for computation of capital gains u/s 50. The CIT-7 Mumbai also directed the AO to examine the applicability of section 50C in the case. In pursuance of CIT-7 Mumbai directions, the AO initiated re-assessment proceedings. During the re-assessment proceedings, the assessee agreed that for the purpose of computing capital gain, the cost of acquisition should be restricted to WDV of Rs. 74,902/- as per section 50 (1) & (2) instead of deduction of actual cost of Rs. 4,87,034/-.However, in its exhaustive submissions, the assessee argued that while computing the capital gain u/s 50 of the Act, the provisions of section 50 C were not applicable. In its submissions before AO, the assessee reiterated the above facts stating that section 50 and section 50C both have independent applications. The assessee also relied on the provisions of section 43 (6) (c) defining block of assets. The assessee also relied on the provisions of explanation below section 41(4). In support of its argument that the provisions of section 50 C were ....
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....s Rs. 46, 53,000/-,that market value of the units as per stamp duty authorities was Rs. 70, 14, 442/-,that the capital gain on sale of those depreciable assets was to be computed as per provisions of section 50 of the Act, that the cost of acquisition of the depreciable assets was admittedly at Rs. 74,902/- i.e. WDV of assets, that as per the assessee, the sale consideration was required to be considered the value as per sale agreement i.e. at Rs. 46,53,000/-.Referring to the decision of the ITAT Mumbai bench in the case of ETC Industries Ltd.(79 DTR-Ind, Trib 391)order dated 10/05/2012 wherein it was held that the provisions of section 50C would be applicable on sale of depreciable assets. Following the decision of ACIT Vs. ETC Industries Ltd. the FAA held that the AO was justified in considering the sale consideration of depreciable assets at Rs. 70,14,442/- u/s.50C of the Act as per the valuation made by stamp duty authorities. 5.Before us, the AR fairly conceded that the issue raised by the assessee was covered against it, that in the matter of United Marine Academy(130ITD113)the Tribunal has decided the issue in favour of the department. However, he contended that the AO sh....
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.... more than period of three years would retain the character of long term capital gain for all other provisions of the Act and consequently qualify for set off against brought forward loss of long term capital gain. Reference was also made to another decision of Mumbai bench of Tribunal in case of Prabodh Investment & Trading Company Vs. ITO in (ITA No. 6557/Mum/2008) in which following the judgment of Hon'ble High Court of Bombay in case of Ace Builders P. Ltd, (Supra) the Tribunal held that section 50 created a legal fiction only for a limited purpose i.e. for the purpose of section 48 and 49 and for the purposes of section 54E, the capital has to be treated as long term capital gain. The Tribunal also accepted the arguments of the assessee that in case capital gain is assessed as long term capital gain the rate of tax would apply as provided in section 112 of the IT Act. It was, therefore, argued that in case of assessee, rate of tax applicable to long term capital gain had to be applied as per the provisions of section 112 of the IT Act. 2.3 The learned DR on the other hand placed reliance on the orders of authorities below. 2.4. We have perused the records....
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....term capital gain for the purpose of all other provisions of the Act. In this case the Ld. AR for the assessee submitted that flat had been held for 15 to 20 years which is supported by the fact that cost of the flat as shown in the balance sheet was only Rs. 1,30,000/-. Therefore, if the flat is held for more than three years the M/s Smita Conductors Ltd tax rate has to be applied as provided in section 112 of the IT Act applicable in respect of capital gain arising from transfer of long term capital asset. 2.6 We, therefore, held that, for the purpose of computation of capital gain, the flat has to be treated as short term capital gain u/s 50 of the IT Act, but for the purpose of applicability of tax rate it has to be treated as long term capital gain if held for more than three years. We accordingly direct the AO to compute the capital gain from the sale of flat and apply the appropriate tax rate after necessary verification in the light of observations made in this order. Respectfully, following the above we direct the AO to compute the capital gain from sale of industrial units and apply the appropriate tax rate after necessary verification,as the assets have been ....
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.... original demand notice. The necessary corollary of this position will be that even when the assessment is reframed, interest can be charged only after the expiry of 35 days from the date of service of demand notice pursuant to such fresh assessment order. (ii) Where the assessment made originally by the Income Tax Officer is either varied or even set aside by one appellate authority but, on appeal, the original order of the Income Tax Officer is restored either in part or wholly, the interest payable under section 220(2) will be computed with reference to the due date reckoned from the original demand notice and with reference to the tax finally determined. The fact that during an intervening period, there was no tax payable by the assessee under any operative order would make no difference to this position. (3) The foregoing legal position will apply mutatis mutandis to the proceedings under other direct taxes also." 3.3 In view of the Circular No.334 Dt.3.4.1982 of CBDT, in case, the assessment is set aside by CIT(A) and setting aside become final, interest under section 220(2) has to be charged only after expiry of 35 days from the date of service of demand....