TaxTMI 
TaxTMI 
2017 (12) TMI 599
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....red to as "the Act") passed by the Assessing Officer (AO) dated 20/12/2012 for the Assessment Year (AY) 2010-11. The assessee has challenged the chargeability of Long Term Capital Gains (LTCGs) on sale of land determined by the CIT(A). 2. Briefly stated, the assessee an individual is engaged proprietary business of manufacturing pharmaceutical machinery. The assessee filed return of income for AY 2010-11 declaring total income of Rs. 2,36,790/-. The return of income was subjected to scrutiny assessment. In the course of the scrutiny assessment, the AO noticed that the assessee has sold factory shed for Rs. 42 lakhs and purchased another factory shed for Rs. 43.10 lakhs It was found by the AO that both the transactions of sale as well as pu....
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....composite and single unit and no separate sale consideration was received towards land and structure. Since it was a composite consideration on transfer of capital assets the AO had no powers to bifurcate such consideration. It has also objected to the manner of bifurcation and working of capital gains. She has submitted that AO was wrong to assume that factory shed would depreciate and would not appreciate. It has been submitted that since the cost has been divided in the ratio of 50:50 the sale price should also be bifurcated in the same ratio. After considering the factual matrix, it is noted that the, assets which have been sold by the appellant during the year was not part of the block of whether the AO can assign separate value for....
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....approvals given by GIDC for transfer of sheds. In view of the above it is submitted that the appellant had not handed over the possession of the entire old shed at the time of execution of the sale deed and continued the operations from part of. the said shed. Similarly the possession of the new shed was taken earlier to establish the operations. It assets on which depreciation was claimed. The appellant did not claim any depreciation on the factory shed. Therefore, the cost for the purpose of calculating the capital gain shall be the cost of acquisition for which the appellant has purchased the asset in the year 2006. Since it is an asset on which no depreciation has been claimed there is no need to apportion the cost of acquisition bet....
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....ls in the same 'block' as contemplated under s.2(11) r.w.s.32 of the Act. The Ld.AR submitted that regardless of the fact that no depreciation was claimed on the factory shed which is inseparable from land, the assessee has bought and substituted another factory shed of similar nature falling in same block. The Ld.AR submitted that no tax liability therefore can be fastened on the assessee towards capital gain in view of the block of the said scheme provided in the statute. 6. The Ld.DR, on the other hand, relied upon the order of the CIT(A). The Ld.DR referred to section 50 of the I.T.Act and submitted that the order of the CIT(A) does not suffer from any infirmity whatsoever in computing the capital gains. The Ld.DR accordingly submitted....