TaxTMI 
TaxTMI 
2024 (9) TMI 155
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.... out of the common order dated 30th November 2007 passed by the Income Tax Appellate Tribunal, Ahmedabad (for short, "the Tribunal") in ITA No.3410/Ahd/97 and ITA/3433/Ahd/97 for the Assessment Year 1993-94. [2] These Tax Appeals are admitted on the following substantial question of law: "Whether, in the facts and circumstances of the case the ITAT was right in law in holding that the sale proceeds of an asset, up on which deduction u/s 32 (1) (ii) of the Act has been claimed and allowed, is required to be taxed as short term capital gain u/s 50 of the Act?" [3] The appellant - assessee claimed depreciation on the Oxygen Gas Cylinders and Glow Sign Boards which were purchased for leasing to earn rental income which has been t....
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....ost of glow sing boards is allowable as deduction from business income. By this arrangement lease rental income is to be taxed in subsequent years which is a revenue receipt. In this way there is no tax evasion or tax avoidance. At the most it can be only termed a deferment of tax but all the same which is only in consequence of a genuine commercial transaction. In this context it is held that the assessee is entitled to deduction of whole cost of glow sign boards for Rs. 14,69,139/- under first proviso to section 32 (1) (ii) of the Income-tax Act." [3.4] Being aggrieved, the respondent - Revenue preferred appeal before the Tribunal. The Tribunal considering the reasoning given by the CIT (A) upheld the same holding that each Glow Sign B....
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....ecision of the Hon'ble Bombay High Court in the case of Nectar Beverages (supra) is now reversed by the Hon'ble Supreme Court of India reported in [2009] 314 ITR 314(SC), wherein it is held that when the assessee purchased plant / assets below Rs. 5000/- prior to 31st March 1995, it did not form part of the block of assets and hence profits on sale of such assets were not taxable either as balancing charge or Short Term Capital Gain under Section 50 in view of proviso to Section 32 (i) (ii) of the Act which was in existence till 31st March 1995. [6] It was submitted that in the facts of the case, admittedly, the Oxygen Gas Cylinders and Glow Sign Boards were purchased prior to 31st March 1995 and the petitioner had claimed 100% depreciat....
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....ottles and crates whose cost per unit did not exceed Rs. 5,000/-. During the year ending 31.3.1998, the company received a sum of Rs. 6,89,91,901 on sale of scrap bottles and crates. The sale proceeds were segregated in two parts: (a) in respect of bottles and crates purchased prior to 31.3.1995; and (b) those purchased after 1.4.1995. In the Return of income filed, the sale proceeds relating to bottles and crates purchased after 1.4.1995 were taken into consideration for the purpose of computation of short term capital gains under Section 50 whereas the sale proceeds relating to bottles and crates purchased prior to 31.3.1995 was not offered for short term capital gains on the ground that the assets stood depreciated at 1....