TaxTMI 
TaxTMI 
2021 (12) TMI 1539
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.... asset. Aggrieved by the said assessment order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee by observing as under: Aggrieved by the order of the Ld. CIT(A), assessee filed appeal before this Tribunal. This Tribunal passed an order by dismissing the appeal of the assessee in ITA No. 2435/Bang/2019 dated 29.05.2020. The assessee filed Miscellaneous Petition on 12.06.2020 before this Tribunal to recall the original order dated 29.05.2020. This Tribunal passed order dismissing the miscellaneous petition on 14.08.2020. The assessee thereafter filed appeal before Hon'ble Karnataka High Court challenging the order of this Tribunal dated 29.05.2020. Hon'ble Court admitted following question of law. Whether, in the facts and circumstances of the case, the Tribunal is right in law in dismissing the Appeal instead of disposing the matter on merits. Hon'ble Court also held as under. "4. We have considered the submissions made by the learned counsel for the parties, It is trite law that for the fault committed by a counsel, a party should not be penalized. It appears that on account of inadvert....
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....ot give any opportunity to the appellant to demonstrate that the building on the said land was a tiny structure of 3.5 squares meant for storing lumber and service lines having BWSSB water supply connection RR No. S10-283. 4. The learned DCIT/CIT(A) ought to have appreciated that the definition of a block of assets under Sec. 50 of the Income tax Act. 1960 includes only an asset "in respect of which depreciation has been claimed under this Act" and hence in the instant case no depreciation had been claimed on the asset as it was a largely a vacant land of 9600Sq. Ft - further the definition of Block of asset under 2(11) of the Income Tax Act 1961 interalia includes Buildings, Machinery or plant or furniture in respect of which depreciation is prescribed. The asset in the instant case does not conform the definition of a block of assets. 5. The learned ACIT/CIT(A) ought to have appreciated that the sale of land having been held for over 3 years constituted a long term capital assets as the gain is arising from is a long term capital gain and the provisions of Sec 50 of the Income Tax Act, 1961 dealing depreciable assets has been wrongly applied in the instant case.....
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....s a vacant site. The Ld. Counsel submitted that, similar disclosure was made consistently in past which is evident from audited financial statements for the FYs 2010-11 to 2014-15 which is verifiable from the assessment records for relevant assessment years. 5. The Ld. Counsel submitted that in the Partnership Deed dated 05.12.2000, the value of the alleged capital asset at the time of contribution towards capital by the partner is shown as Rs.45,65,025/- which is the position also in the audited financial statements of the assessee. He submitted that right from the inception, the alleged capital asset is treated as fixed asset being in the nature of vacant site and the same was disclosed in the Significant Accounting Policies and notes on Accounts to the financial statements. He emphasized that the shed which is put up on the land is very negligible as compared to the land. The Ld. Counsel demonstrated the same as under: Particulars Sq. Mtrs % Sq. Ft. % Land 893.04 9,600 Smallmotor shed 3.5 0.392 38 0.396 Shed 2 0.224 21 0.219 Total 0.616 0.615 6. The Ld. Cou....
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....description of the property given in both the partnership deed and the Sale Deed, it is apparent that the property in question was not simply a vacant site as claimed by the appellant but had a building constructed on it and consequently, it was included in the Schedule of Assets under Land and Building. Therefore the AO was correct in applying the provisions of Section 50 of the Act, which reads as follows:" From the above, it is clear that since there was shed on the alleged land, the view of Ld.AO was upheld without verifying the records. Though the sheds on the land was depreciable assets, the financial statements for year under consideration and preceding assessment year suggests that no depreciation was claimed by assessee. 7.2 Further land was transferred by assessee to the purchaser on as is where is basis. There was no bifurcation of cost in respect of the land and the sheds. The sale agreement was composite in nature. 8. In case of CIT vs. I.K. International P. Ltd. (supra), Hon'ble Delhi Tribunal held as under: "The Assessing Officer in our opinion was in error in invoking the provisions of Section 50(2) of the Act to the sale of the land and buildi....