Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

December 2010

Capital gains : Computation : Depreciable asset : S. 50 of Income-tax Act, 1961 : Land is not a depreciable asset : S. 50 not applicable where land forms part of whole undertaking which is transferred.

By K. B. Bhujle | Advocate
Reading Time 1 mins

New Page 1

Reported :

24. Capital gains :
Computation : Depreciable asset : S. 50 of Income-tax Act, 1961 : Land is not a
depreciable asset : S. 50 not applicable where land forms part of whole
undertaking which is transferred.

[CIT v. Coimbatore Lodge,
328 ITR 69 (Mad.)]

The assessee was running a
lodge. The assessee transferred the lodge and claimed exemption u/s. 54EC of the
Income-tax Act, 1961. The Assessing Officer disallowed the claim for exemption.
The Commissioner (Alleals) and the Tribunal held that the assessee was entitled
to exemption u/s.54EC of the Act.

On appeal by the Revenue,
the Madras High Court upheld the decision of the Tribunal and held as under :

“Land is not the
depreciable asset. S. 50 of the Act deals only with the transfer of
depreciable assets. Once the land forms part of the assets of the undertaking
and the transfer is of the entire undertaking as a whole, it is not possible
to bifurcate the sale consideration in a particular asset.”


Download PDF

You May Also Like

Manner of Disclosure of Accounting Policies

Educational institution : Exemption u/s. 10(23C)(vi) of Income-tax Act, 1961 : A.Ys. 2004-05 to 2007-08 : Merely because an educational institution accumulates income, it does not go out of consideration of S. 10(23C)(vi); If accumulation of surplus is wi