TaxTMI 
TaxTMI 
2018 (5) TMI 1585
X X X X Extracts X X X X
X X X X Extracts X X X X
....it at Rs. 66. 15 lakhs, that the profit was further reduced by Rs. 44. 01 lakhs for the investment made in acquiring a new factory gala, that finally the assessee offered profit on sale of land and factory at Rs. 22. 14 lakhs, that the asset sold was located at Vapi, whereas the new asset was acquired at Mumbai, that it had paid in advance of Rs. 44. 01 lakhs to the builder /developer. Referring to the provisions of section 50, 32, 2 (11) 2 (47) of the Act and 53A of the Transfer of Property Act, he held that the assessee had sold depreciable assets, that it had paid Rs. 44. 01 lakhs for the asset which had not been acquired by it, that the amount paid by the assessee for booking a gala in Mumbai would not fall within the meaning of phrase 'asset had been acquired', as mentioned in section 50(2) for the purpose of computing capital gains. He further held that the new asset would not form part of block of assets, that gala was neither in possession of the assessee nor it was taken/acquired during the year under consideration, that it was not ready for business use. Referring to the allotment letter dated 12/02/2011, he held that the assessee had paid in advance of Rs. 44. 01 lakhs o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any merit, that for claiming deprecia - tion the assessee should own an asset and should use it for the business, that both the conditions should be satisfied together in order to allow any asset to have the benefit of depreciation, that the gala would not fall into the block of assets which ceased to exist due to sale of asset and because no new asset was acquired by the assessee. He referred to the cases of Sabah Investment (P)Ltd. (60 SOT 173), Liquidators of Pursa Ltd. (25 ITR 265) and held that there was vast distinction between the asset acquired and asset likely to be acquired, that the cases relied upon by the assessee were based on different facts and that same were not relevant to decide the issue. Confirming the order of the AO, he dismissed the appeal filed by the assessee. 4. During the course of hearing before us, the Authorised Representative(AR) stated that during the year under consideration the assessee had acquired rights of office building by paying Rs. 44. 01 lakhs, that assessee was issued an allotment letter, that it had entered the disputed assets into the block officer to building, that the only difference in computation of the STCG was about inclusion of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Act. In our opinion, there are two issues to be decided. Whether the assessee was right, in claiming depreciation, is the first issue. Secondly, it has to be decided as to whether the acquisition of gala at Mumbai should be included in the block of assets for the year under consideration. As far as claiming of depreciation is concerned, the AR himself had fairly considered that assessee was not entitled to claim depreciation. Now we would deliberate upon the issue of acquisition of gala at Mumbai and its legal consequences. The undisputed facts are that the assessee was issued an allotment letter and as per the said letter the remaining payment was to be made as under: A. Rs. 44, 01, 000/- received by 09. 02. 2011 B. Rs. 10, 00, 000/- on completion of the 1st floor podium slab of the said Crown Business Park C. Rs. 10, 00, 000/- on completion of the 4th floor slab D. Rs. 10, 00, 000/- on completion of the 9th floor slab E. Rs. 2, 94, 000/- on possession In our opinion, to claim benefit of section 50 of the Act, issuance of an allotment letter from a builder or developer is not sufficient. On 09. 02. 2011, the assessee had made payment of Rs. 44. 01 lakhs. Second ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es relating to the computation of business income are not incorporated or worked into the rules relating to the computation of capital gains. The distinction between the income under the heads "Business" and "Capital gains" has been brought out by the Supreme Court in CIT v. Express Newspapers Ltd. (1964) 53 ITR 250. xxxxx It is therefore clear that while examining the applicability of the provisions of section 50, we are not to be influenced by the rules relating to the computation of the business income. xxxxx 9. In the absence of any express requirement in the statutory provision or the justification to read into it a built-in requirement, it is not possible to uphold the contention of the learned departmental representative that the assessee should be found to have been carrying on a business in the year in which the new asset is purchased. " In our opinion, the above matter is of no help to the assessee. The basic question before us is acquisition of asset and not carrying on of a business and purchase of new asset. Similarly, in the case of Fluorescent Fixtures(supra)the Tribunal had decided that use of asset was not a condition precedent for making adjustment in ....