Section 50, read with sections 45 and 49, of the Income-tax Act, 1961 - Capital gains

IT : Godown purchased in 1969, but not used since 1985-86 on which no depreciation was claimed in subsequent years, would not be included in block of assets in view of newly introduced section 50 w.e.f. 1-4-1988; profit arising on sale could not be taxed as short-term capital gain but as long-term capital gains

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[2015] 55 taxmann.com 287 (Gujarat)

HIGH COURT OF GUJARAT

Income-tax Officer

v.

Parikh Transport Co.*

K.S. JHAVERI AND K.J. THAKER, JJ.

TAX APPEAL NO. 245 OF 2001†

NOVEMBER  25, 2014

Section 50, read with sections 45 and 49, of the Income-tax Act, 1961 - Capital gains - Computation in case of depreciable asset (Scope of) - A godown was purchased in 1969, but it was not used for purpose of business since assessment year 1985-86 - No depreciation was claimed in subsequent years - Tribunal held that section 50 which is newly introduced w.e.f. 1-4-1988 would not be applicable in instant case and said asset would not form part of block of assets and profit arising on sale of said asset could not be taxed as short-term capital gain and that said asset was long-term capital asset and, accordingly, long-term capital gain would be computed by applying provisions of sections 45 and 49 - Whether view taken by Tribunal was just and proper - Held, yes [Paras 6 and 9] [In favour of assessee]