TaxTMI 
TaxTMI 
2019 (5) TMI 1544
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.... on car. 4. The orders of the Learned CIT(A) and the Learned AO are bad in law and on facts. 3. Apropos ground relating to short term capital gain :- Brief facts of the case are as under :- During the course of assessment proceedings the AO noted that the assessee had sold flat -No. 1203 and 1204 in Amarnath- Towers for a sum of Rs. 161,75,480/-; out of which the appellants 50% share was Rs. 80,87,740/-. The AO noted that in the block of depreciable assets the WDV of these assets was only Rs. 3,81,661/-. Therefore, as per the provisions of section 50 of the Act short term capital gains of Rs,67,06,074/- were assessable. During the course of assessment proceedings the assessee objected to the proposed addition on the grounds that the said block was not extinguished as during the year the assessee had purchased property worth Rs. 1,24,68,460/- in Lakhani Centrium'. Moreover If was submitted that the assessee was using a part of his residential premises (Namah building) for office purposes, which was purchased in earlier years for Rs. 1,02,49,0407-, and the cost of the said building was also part of the depreciable block, The AO however, rejected the explanation ....
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.... the purposes of the said clause (vi). Section 50 Notwithstanding anything contained in clause (42A) of section 2, where the capital asset is an asset forming part of a block of assets in respect of which depreciation has been allowed under this Act or under the Indian Income- tax 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 the block of assets acquired during the previous year, such excess shall be deemed to be the capital gains arising from the transfer of short- term capital ....
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.... the Amarnath properties. Hence, I am in agreement with the AO that the excess sole consideration of the Amarnath Properties is hit by the provisions of section 50. This ground of appeal is therefore dismissed. 5. Against the above order assessee is in appeal before us. We have heard both the counsel and perused the records. 6. Learned Counsel of the assessee submitted that assessee has sold a depreciable asset and purchased commercial property. He further stated that the flat purchased enters the block on acquisition, and it is not dependent upon the user. In this regard he referred to following case laws : * CIT Vs. GR Shipping (ITA No. 822/Mum/05 dated 17.7.2008) * CIT Vs. Oswal Agro Mills Ltd. & Others (341 ITR 467) * Nirma Vs. ACIT (390 ITR 302) * E-City Vs. ACIT (24 ITR 73) * CIT Vs. Yamaha (328 ITR 297) 7. Per contra, learned Departmental Representative relied upon the orders of authorities below. He referred to the following decisions :- * ACIT Vs. Rishiroop Polymers (P) Ltd.(102 ITD 128) * Dinesh Kumar Gulabchand Agrawal Vs. ACIT (267 ITR 768) 8. We have carefully considered the submissions and peru....
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....re being offered under the head income from house property can by no stretch of imagination be said to be entitled for automatic entry into the block of depreciable asset. In this view of the matter, the reference to section 2(11), 43(6) & 50 by learned CIT(A) is germane and support the case of the Revenue. Section 2(11) defines block of asset as a group of asset falling within the class of asset........ in respect of which the same percentage of depreciation is permissible. The income from 'Namah' building and the premises in 'Lakhani Centrium' was falling under the head 'income from house property' and hence these premises cannot be said to be falling under any asset group on which any rate of depreciation is prescribed as on such asset no depreciation is permissible. 12. The case laws referred by learned Counsel of the assessee as mentioned by us here in above are not applicable on the facts of the case. We have already noted that the 'Namah' building and property in 'Lakhani Centrium' never entered the block of depreciable asset as income from them was falling under the head income from house property. In this view of the matter in our considered opinion learned CIT(A) has p....
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....nt. Nowhere does this document specify that the delivery of the said car is being made for the first time. I agree with the AO that it is hard to believe that a car sold on 12-01-2009 and registered on 04-02-2009, would be delivered on 19-06-2009. In my opinion appellant has not been substantially able to prove that he was not in possession of the car in the F.Y. 2008-09. In the circumstance I have no reason to disturbed the computation of the AO on this ground. On the other hand there is every reason to believe that the car was ready to use in the F.Y. 2008-09. Therefore, in terms of Explanation 5, to section 32(1), the car was depreciable in A.Y.2009-10. In the circumstances the AO has rightly reduced the deprecation for A. Y, 2009- 10, in order to arrive at the WDV as on 01-04-2009. The AO may also consider taxing the gift in AY 2009-10, by that logic. However, I agree with the appellant that as the car was purchased in January 2009, it was entitled to only 50% of the eligible depreciation in A.Y.2009-10 and therefore the WDV as on 01-04-2009 should be Rs. 65,80,236/-, Hence, the allowable depreciation would be Rs. 9t87,035/. 15. Against the above order assessee is in appeal ....