2022 (11) TMI 827

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....gains arising out of sale of property under the head short term capital gain u/s 50 of the Act on the ground that appellant has disclosed the asset under Companies Act as business asset and not claiming of depreciation under IT Act does not change the character of asset. 2. The ld. CIT(A) while confirming the addition made u/s 50 disregarding the contention of the appellant that the property in question was never included in the block of asset and claimed depreciation u/s 32 for invoking provision of sec. 50 of the Act. 3. The ld. CIT(A) while making addition u/s 50 failed to appreciate that property was held by the appellant as investment and also let out to earn rental income thereon. 4. Reliance of ld. CIT(A) o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ld. A.O held that these offices were depreciable assets and therefore, the assessee should have computed short term capital gain on sale of these assets and offered to tax. Before the ld. A.O, it was submitted by the assessee that it had converted these shops to investment in the F.Y. 2009-10 and no depreciation had been charged from F.Y. 2009-10 onwards. Accordingly, it was claimed before the ld. A.O that these shops were not part of the block as on the date of sale and therefore, provisions of sec. 50 are not applicable. The ld. AO rejected the arguments of the assessee by noting that the offices acquired by the assessee in A.Y. 2006- 07 and in respect of which depreciation was allowed to it as a business asset for four years i.e. upto th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....spaces in question had never been used for the business purposes and consequently no depreciation allowable u/s 32 of the Act was ever claimed. It is stated that the AO misconceived the depreciation provided in the balance sheet, which needed to be done under the provisions of Companies Act but such depreciation was first added and depreciation allowable u/s 32 of the Act was specially worked out and depreciation on constructed basis was left out. A detailed worksheet of block of asset and depreciation claimed under IT Act was enclosed as annexure. The AO claimed that these buildings are treated as investments by the company and let out for year to year and the rental income disclosed under the head "house property income". It is therefore,....