M/s. Shankar Kapda Niryat Pvt.Ltd., Baroda V. The Income tax Officer,Ward-4(3), Baroda

ITA 2275/AHD/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5916 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRIPARVEEN KUMAR
• Assessee Lawyers: SHRIMILAN MEHTA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Business expenditure; Cost of acquisition; Fair market value; Unabsorbed depreciation
• Section: 32; 143(3); 50C

Judgement Text

, SMC/B IN THE INCOME TAX APPELLATE TRIBUNAL SMC/B BENCH, AHMEDABAD BEFORESHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.2275/AHD/2012 / ASSESSMENT YEAR: 2009-10 M/S. SHANKAR KAPDANIRYAT PVT LTD, C/O. SHAH, MEHTA &BAKSHI, 2 ND FLOOR, PRASANNA HOUSE, ASSOCIATED SOCIETY, NR. AKOTA STADIUM, BARODA-390020 PAN : AAACS 4066 R VS. THE ITO, WARD 4(3), VADODARA [ / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRIMILAN MEHTA, CA REVENUE BY : SHRIPARVEEN KUMAR, SR DR / DATE OF HEARING : 15/03/2017 / DATE OF PRONOUNCEMENT: /05/2017 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 200 9-10 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S)-III, BARODA DATED 18.07.2012 VIDE APPEAL NO.CAB/III-181/11-12, ARISING OUT OF OR DER U/S 143(3) DATED 30.11.2011 FRAMED BY THE ITO, WARD-4(3), BARODA. 2. BRIEFLY STATED FACTS, AS CULLED OUT FROM THE ASS ESSMENT RECORDS ARE THAT THE ASSESSEE IS A REGISTERED COMPANY ENGAGED IN THE BUS INESS OF MANUFACTURING OF GREY COTTON FABRIC. IT FILED ITS RETURN OF INCOME ON 21. 08.2009 DECLARING TOTAL INCOME AT RS. NIL. THE CASE OF ASSESSEE WAS PICKED UP FOR SCR UTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS 'THE ACT') WAS FRAMED VIDE ORDER DATED 30.11.2011. WHIL E FRAMING THE ASSESSMENT, THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME AT RS. NIL AND LONG TERM CAPITAL GAIN AT ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 2 RS.27,82,016/-. LEARNED ASSESSING OFFICER DISALLOWED EXPENSES OF RS. 10,84 ,203/- ON THE GROUND THAT NO BUSINESS WAS CARRIED OUT DURI NG THE YEAR. HE ALSO CALCULATED THE SALE CONSIDERATION OF LAND AND BUILDING SOLD DURING THE YEAR AT RS. 39,03,346/- U/S. 50C OF THE ACT AS AGAINST SALE CONSIDERATION OF RS. 20,11,000/- SHOWN BY THE ASSESSEE AND ACCORDINGLY REDUCED BLOCK OF ASSETS BY AN AMOUN T OF RS. 7,89,950/- AND COMPUTED LONG TERM CAPITAL GAIN ON SALE OF LAND AT RS. 27,82,016/-. LEARNED ASSESSING OFFICER ALSO DID NOT ALLOW SETOFF UNABSOR BED DEPRECIATION U/S. 32 OF THE ACT AS AGAINST LONG TERM CAPITAL GAIN FOR SALE OF LAND AT RS. 27,82,016/-. 3. AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND PARTLY SUCCEEDED AS LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) CONFIRMED ALL THE ADDITION EXCEPT ONE REL ATING TO SETOFF OF BROUGHT FORWARD UNABSORBED DEPRECIATION FOR WHICH THE DIRECTION WER E GIVEN TO THE ASSESSING OFFICER TO VERIFY THE CLAIM OF BALANCE UNABSORBED DEPRECIAT ION BROUGHT FORWARD TO THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2009-10 A ND IF FOUND CORRECT SHOULD BE ALLOWED SETOFFOF SUCH UNABSORBED DEPRECIATION WITH THE INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN AS PER LAW. 4. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE T RIBUNAL RAISING FOLLOWING GROUNDS OF APPEAL :- 1. THE ID. CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMIN G THE ACTION OF AO IN MAKING A DISALLOWANCE OF RS.10,84,203/- ON THE GROUND THAT N O BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE DURING THE YEAR. 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CON FIRMING THE ACTION OF THE AO IN SEGREGATING THE TRANSACTION OF SALE OF OFFICE BUI LDING INTO SALE OF LAND AND SALE OF BUILDING AND THEREBY ASSESSING THE CAPITAL GAINS SEPARATELY. 3. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONF IRMING THE ACTION OF THE AO IN APPLYING THE PROVISION OF SECTION 50C TO SALE OF LAND AND THEREBY COMPUTING THE SALE CONSIDERATION AT RS.39,03,346/-. ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 3 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFI RMING THE ACTION OF THE AO IN APPLYING THE PROVISION OF SECTION 50C TO SALE OF BUI LDING AND THEREBY REDUCING THE BLOCK OF ASSET BY AN AMOUNT OF RS.7,89,950/- 5. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN COMPUT ING LONG TERM CAPITAL GAIN AT RS.27,82,016/- ON SALE OF LAND. 6. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN INITIA TING PENALTY PROCEEDING U/S 271(1)(C). 5. GROUND NO. 1 RELATES TO DISALLOWANCE OF EXPENSES OF RS. 10,84,203/- MADE BY ASSESSING OFFICER BY TAKING THE BASIS THAT NO BUSI NESS ACTIVITY WAS CARRIED OUT BY ASSESSE DURING THE YEAR. LEARNED AUTHORISED REPRESE NTATIVE SUBMITTED THAT' THE ASSESSING OFFICER HAS DISALLOWED THE ENTIRE BUSINES S EXPENDITURE CLAIMED BY THE ASSESSEE AMOUNTING TO RS. 10,84,203/- . WHILE DISAL LOWING THE SAIDAMOUNT, THE AO HAS STATED THAT THE ASSESSEE HAS NOT CARRIED ANY B USINESSACTIVITY DURING THE YEAR UNDER CONSIDERATION. IF MANUFACTURING ACTIVITY IS NOTUNDE RTAKEN, THEN HOW EXPENSES RELATING TO MANUFACTURING, ADMINISTRATIVE &SELLING AND FINAN CIAL CHARGES ARE ALLOWABLE? THE ASSESSEE VIDE SUBMISSION DTD 07/07/2011 HAS STATED THAT THE COMPANY HAS DOSED DOWN ITS PRODUCTIONACTIVITY BUT-COMPANY HAS NOT YET BEEN DISSOLVED. SO THESE EXPENSES ARENECESSARY TO MAINTAIN THE EXISTENCE OF THE COMPANY AND COMPANY'S ASSETSARE FIXED IN NATURE. THE SUBMISSION OF THE A SSESSEE IS PERUSED & THE SAME ISNOT TENABLE IN NATURE FOR THE REASONS THAT THAT THE ASS ESSEE HAS SHOWN INCOME FROM RENT, INTEREST, ETC. AGAINST THIS INCOME, EXPENSES SUCH ASMANUFACTURING, ADMINISTRATIVE & SELLING EXPENSE AND FINANCIAL CHARGES ARE NOTALLOWA BLE AS NO MANUFACTURING ACTIVITY WAS CARRIED OUT AND NO SALE WAS MADEDURING THE YEAR . IT IS ALSO MENTIONED THAT THE OFFICE PREMISES AND PLANT &MACHINERY ARE ALSO SOLD DURING THE YEAR, AND THE PREMISES IS GIVEN ON RENT , THEN HOW THESE EXPENSES ARE CLAIMED TO BE ALLOW ED?' 6. LEARNED AUTHORISED REPRESENTATIVE FURTHER RELIED ON THE DECISION OF HONBLE HIGH COURT OF KOLKATA IN THE CASE CIT VS. GANGA PRO PERTIES LTD. 199 ITR 94 (CAL.) AND ANOTHER JUDGMENT OF HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. NEW SAVAN SUGAR AND GUR REFINING CO. LTD. 185 ITR 564 ( CAL.). ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 4 7. ON THE OTHER HAND LEARNED DEPARTMENTAL REPRESENT ATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LOWER AUTHORITIES AND ADDED THAT NO BUSINESS ACTIVITY HAS BEEN CARRIED OUT BY THE ASSESSEE DURING THE YEAR AND THE REFORE SUCH EXPENSES OF RS. 10,84,203/- HAS BEEN RIGHTLY DISALLOWED BY THE LEAR NED ASSESSING OFFICER AND CONFIRMED BY LEARNED COMMISSIONER OF INCOME TAX (AP PEALS). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US AND GONE THROUGH THE JUDGMENT RELIED BY THE LEARNED COUNSEL. THE ISSUE RAISED IN THIS GROUND IS AGAINST THE DISALLOWANCE OF EXPENSES OF R S. 10,84,203/- MADE BY LEARNED ASSESSING OFFICER AND FURTHER CONFIRMED BY COMMISSI ONER OF INCOME TAX (APPEALS). 9. FROM PERUSAL OF THE COMPUTATION OF INCOME WE NOT ICE THAT ASSESSEE COMPANY WAS INCORPORATED A LONG BACK ON 11.02.1994 AND IS E NGAGED IN THE BUSINESS OF MANUFACTURING OF TILES AND POWER LOOMS. ITS AUTHOR IZED PAID UP CAPITAL IS RS. 2 CRORE, BALANCE OF RESERVE &SURPLUS AS ON 31.03.2009 IS AT RS. 1,09,34,134/- . FURTHER FROM PERUSING AUDITED BALANCE SHEET WE NOTICE THAT IN TH E IMMEDIATELY PREVIOUS FINANCIAL YEAR I.E. FINANCIAL YEAR 2007-08 , ASSESSEE HAS CAR RIED OUT MANUFACTURING ACTIVITY AND HAS INCURRED RS. 22,57,833/- INCLUDING COST OF RAW MATERIAL CONSUMED AT RS. 60,91,823/- AND WRITTEN DOWN VALUE OF NET BLOCK OF ASSET WAS AT RS. 3,22,99,515/-. THE REASON FOR MENTIONING ALL THE ABOVE FIGURES IS TO HAVE A LOOK ON THE FINANCIAL TRANSACTIONS AND THE CONSISTENT CONDUCTING OF BUSIN ESS BY THE ASSESSEE COMPANY. IT HAS NOT BEEN DISPUTED BY THE REVENUE THAT ASSESSEE WAS REGULARLY INVOLVED IN RUNNING BUSINESS ACTIVITY UP TO THE IMMEDIATELY PREVIOUS FI NANCIAL YEAR I.E. FINANCIAL YEAR 2007-08. IT IS ONLY FOR THE YEAR UNDER APPEAL WHERE IN THE ASSESSEE IS UNABLE TO CARRY OUT ANY BUSINESS ACTIVITY DUE TO SLOWING DOWN OF TH E BUSINESS AND INCURRED HEAVY LOSSES. THE SHORT QUESTION BEFORE US IS WHETHER TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN CONFIRMING THE DISAL LOWANCE OF EXPENSES OF RS. 10,84,203/-ON THE GROUND THAT NO BUSINESS WAS CARRI ED OUT DURING THE YEAR? BEFORE MOVING AHEAD TO ADJUDICATE THIS ISSUE, LET US GO TH ROUGH THE RATIO OF DECISION HELD IN THE CASE CIT VS. GANGA PROPERTIES LTD. (SUPRA) WHER EIN HONBLE COURT HAS HELD THAT:- ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 5 'A COMPANY, EVEN IF IT DERIVES4 INCOME FROM 'OTHER SOURCES', HAS TO M AINTAIN ITS ESTABLISHMENT FOR COMPLYINGWITH STATUTORY OBLIGATIONS SO LONG IT IS IN OPERAT ION AND ITS NAME IS NOT STRUCK OFF THE REGISTER OF COMPANIES OR UNLESS THE C OMPANY IS DISSOLVED WHICH MEANS CESSATION OF ALL CORPORATE ACTIVITIES OF THE COMP ANY FOR ALL PRACTICAL PURPOSES. SO LONG AS IT IS IN OPERATION, IT HAS TO MAINTAIN ITS STATUS AS A COMPANY AND IT HAS TO DISCHARGE CERTAIN LEGAL OBLIGATIONS AND, FOR THAT PURPOSE, IT IS NECESSARY TO APPOINT CLERICAL STAFF AND A SECRETARY OR ACCOUNTANT AND INCUR INCIDENTAL EXPENSES. IN THIS BACKGROUND, THE CONCLUSION OF THE TRIBUNAL THAT THE EXPENSES INCURRED WERE WHOLLY AND EXCLUSIVELY FOR THE ACTIVITIES TO EARN INCOME WAS A REASONABLE CONCLUSION. THE EXPENSES WERE THEREFORE DEDUCTIBLE.' 10. WE FURTHER OBSERVE THAT HONBLE COURT IN THE CA SE CIT VS. NEW SAVAN SUGAR AND GUR REFINING CO. LTD. (SUPRA) HAS HELD THAT:- 'COMPANY - NOT CARRYING ON ANY BUSINESS - DERIVING INCOME FROM 'OTHER SOURC ES' ONLY - HAS TO MAINTAIN ITS ESTABLISHMENT AND COMPLY WITH STATUTORY OBLIGATIONS - EXPENDITURE THERE IS IN CONNECTION WITH THE EARNING OF INCOME FROM 'OTHE R SOURCES' - DEDUCTIBLE EVEN IF UNREMUNERATIVE.' 11. THE COMMON VIEW TAKEN IN BOTH THE ABOVE JUDGME NTS IS THAT A PRIVATE LTD. COMPANY WHICH IS RUNNING BUSINESS SINCE LAST MANY Y EARS HAS TO INCUR MINIMUM EXPENSES FOR MAINTAINING THE ESTABLISHMENT AND DAY TO DAY EXPENSE AND THEY ARE THEREFORE PART OF BUSINESS EXPENDITURE EVEN IF NO R EVENUE IS GENERATED FROM BUSINESS ACTIVITIES. IN THE CASE OF ASSESSEE EVEN THOUGH THE RE IS NO REVENUE FROM SALES OPERATIONS BUT IT HAS SOLD SOME OF ITS ASSETS DURIN G THE YEAR AND HAS SHOWN LOSS ON SALE OF ASSETS AT RS. 1,19,64,510/-. IN OUR VIEW EV EN THE ACTIVITY OF SELLING THE BUSINESS ASSETS IS ALSO A PART OF BUSINESS ACTIVITY ONLY. IN THE GIVEN CASE ASSESSEE HAS SOLD OFFICE PREMISES, PLANT MACHINERY, AND OFFICE E QUIPMENT AND COMPLETE THESE TRANSACTIONS SUCCESSFULLY ASSESSEE NEEDS TO HAVE ES TABLISHMENT MINIMUM STAFF, EXPENDITURE ON ELECTRICITY, WATER, TRAVELLING EXPEN DITURE ETC. IN THE GIVEN CASE ALSO, THE IMPUGNED EXPENSES OF RS. 10,84,203/- INCLUDES D AY TO DAY ROUTINE EXPENSES INCURRED IN THE BUSINESS TOWARDS RUNNING OFFICE EST ABLISHMENT SUCH AS TELEPHONE EXPENSE, SECURITY CHARGE, LEGAL FEES, PHYSICAL EXPE NSES OF OFFICE AND ENTERTAINMENT EXPENSES ETC. WATER CHARGES, PAYMENT TO EMPLOYEES ETC. ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 6 12. IN THE LIGHT OF THE JUDGMENTS REFERRED ABOVE AN D DETAILED DISCUSSION MADE BY US IN THE PRECEDING PARAGRAPHS, WE ARE OF THE CONFIRME D VIEW THAT AS THE ASSESSEE HAS BEEN RUNNING BUSINESS IN PRECEDINGYEARS AND EVEN TH OUGH IT HAS CARRIED OUTLITTLE OR NO BUSINESS ACTIVITY OF PURCHASE AND SALE DURING THE Y EAR, STILL IT IS ENTITLED TO CLAIM LOSS OF EXPENSES INCURRED FOR SELLING ITS ASSETS AND RUN NING THE OFFICE ESTABLISHMENT SMOOTHLY. WE ACCORDINGLY ALLOW THE ASSESSEES GROUN D AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF REVENUE EXPENSE OF RS .10,84,203/- AS BUSINESS EXPENDITURE FOR THE YEAR UNDER APPEAL. 13. NOW WE TAKE UP GROUND NO. 2 AND 5, WHICH RELATE S TO TRANSACTIONS OF SALE OF OFFICE PREMISES. BRIEF FACTS IN THIS REGARD ARE DUR ING THE YEAR ASSESSEE SOLD OFFICE PREMISES SITUATED AT A-1, MARS CO-OPERATIVE HOUSING SOCIETY LTD. CHITRAKUT PARK, ELLORAPARK, SUBHANPURA, VADODARA ON 23.03.2009 FOR A SALE CONSIDERATION OF RS. 20,11,000/- BY WAY OF AGREEMENT TO SALE. LEARNED AS SESSING OFFICER ENQUIRED ABOUT THE JANTRI RATES FROM THE OFFICE OF SUB- REGISTRAR FOR GIVING FAIR MARKET VALUE OF THE LAND. NECESSARY DETAILS WERE MADE AVAILABLE BY THE SUB-REGISTRAR RELATING TO LAND MEASURING2100 SQUARE FEET. LEARNED ASSESSING OFFICE R ACCORDINGLY APPLIED THE RATE OF 195.16 SQ. MTRS.AND CALCULATED THE FAIR MARKET V ALUE OF LAND AT RS. 39,03,346/-. LEARNED ASSESSING OFFICER ALSO OBSERVED THAT THE BU SINESS PREMISES ON WHICH ASSESSEE WAS REGULARLY CLAIMING DEPRECIATION IS HAV ING TWO COMPONENTS NAMELY LAND AND STRUCTURE THEREON AND LEARNED ASSESSING OFFICER , WAS OF THE VIEW THAT LAND BEING A NON- DEPRECIABLE ASSETS NEEDS TO BE EXCLUDED FROM T HE CALCULATION OF SHORT TERM CAPITAL GAIN FOR SALE OF DEPRECIABLE ASSETS PROVIDE D IN SECTION 50C OF THE INCOME TAX ACT. THE LEARNED ASSESSING OFFICER FURTHER WENT AHE AD TO CALCULATE THE COST OF LAND AND BUILDING SEPARATELY WHICH WERE PURCHASED IN THE YEAR 1994. HE CALCULATED THE COST OF LAND AT RS. 4,99,011/- AND BUILDING AT RS. 1,00,989/-. FOR GIVING THE BENEFIT OF INDEXATION THE COST OF ACQUISITION OF LAND WAS COMP UTED AT RS. 11,21,330/- AND THEREBY CALCULATED LONG TERM CAPITAL GAIN FROM THE LAND AT RS.27,82,016/-(RS. 39,03,346/- LESS RS.11,21,330/-). AS REGARDS THE BUILDING, BEING A DEPRECIABLE ASSETS, LEARNED ASSESSING OFFICER CALCULATED FAIR M ARKET VALUE OF THE BUILDING AT RS. ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 7 7,89,950/- AND REDUCED IT FROM THE OPENING WDV OF B UILDING. AS THEWDV OF BLOCK OF ASSETS OF BUILDING WAS LEFT WITH A POSITIVE VALU E AFTER DEDUCTING RS. 7,89,950/-, SHORT TERM CAPITAL GAIN/LOSS DID NOT ARISED. 14. AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS). LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) CONFIRMED THE VIEW OF LEARNED ASSESSING OFFICER OF BIFURCATING THE IM PUGNED PROPERTY INTO LAND AND BUILDING AND ALSO CONFIRMED THE LONG TERM CAPITAL G AIN ON SALE OF LAND AT RS. 27,82,016/- AND ALSO CONFIRMED THE SEPARATE VALUATI ON OF IMPUGNED BUILDING AT RS. 7,89,950/- BY OBSERVING AS FOLLOWS:- 5.2 I HAVE CONSIDERED THE APPELLANTS SUBMISSIONS A ND THE AO'S OBSERVATIONS. SO FAR AS THE APPELLANT'S CONTENTION THAT SECTION 50C IS NOT APPL ICABLE TO DEPRECIABLE ASSETS IS CONCERNED, SAME IS NOT ACCEPTABLE IN VIEW OF THE DECISION OF THE SPECI AL BENCH OF HAT MUMBAI BENCH IN THE CASE OF [2011] 130 ITD 113 (MUM.)(SB), INCOME-TAX OFFICER-22(3)(4) V. UNITED MARINE ACADEM Y. IN THIS DECISIOLN, THE SPECIAL BENCH HAS HELD THAT THE PROV ISION OF SECTION 50C ARE APPLICABLE TO THE TRANSFER OF DEPRECIABLE CAPITAL ASSETS COVERED BY SECTION 50 AND IN COMPUTING THE CAPITAL GAIN ARISING FROM THE SAID TRANSFER BY ADOPTING THE STAMP DUTY VALUAT ION. HENCE, THIS CONTENTION OF THE APPELLANT IS REJECTED. 5.3 THE APPELLANT HAS RELIED UPON THE DECISION IN THE CASE OF M/S. RAJESH EXPORTS LIMITED (SUPRA) TO CLAIM THAT WHERE THE PRICE PAID FOR BUILDI NG AND LARIP 1 IS A COMPOSITE ONE, AND NO DISTINCTION IN THE CONSIDERATION PAID TO VENDOR CAN BE M ADE, THEN THE ENTIRE AMOUNT QUALIFIES FOR DEPRECIATION. BUT THERE ARE DECISIONS WHICH STATES THAT SINCE LAND IS NOT DEPRECIABLE ASSETS, HENCE NO PART OF THE SALE CONSIDERATI ON RECEIVED ON ACCOUNT OF LAND CAN BE TAXED U/S 50 OF THE ACT. SIMILARLY, WHERE CONSOLIDATED PAYMENT IS MADE FOR LAND AND BUILDING, THEN DEPRECIATION CANNOT BE CLAIMED ON THE E NTIRE PURCHASE VALUE. THESE DECISIONS ARE AS FOLLOWS: ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 8 1. [2008] 114 ITD 286 (DELHI), DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 3(1), NEW DELHI, V. CAPITAL CARS (P.) LTD. 2. [2010] 7 TAXMANN.COM 68 (DELHI), IN COME-TAX OFFICER, WARD-1, PA NIP AT, V, KAPURSCO COLD STORAGE (P.) LTD. 3. [2011] 129 ITD 1 (DELHI), VASHTI MANAGEMENT SERV ICES (P.) LTD. ,V. INCOME-TAX OFFICER, WARD 17(2), 4. [2012] 20TAXMANN.COM 197 (DELHI), COMMISSIONER O F INCOME-TAX~IV, V. I.K. INTERNATIONAL (P.) LTD. 5.4 SO FAR AS RELIANCE PLACED BY THE APPELLANT ON THE DECISION IN THE CASE OF RAJESH EXPORTS REPORTED IN 2006, 9 SOT 28 (BANG.)(URO), IS CON CERNED,, IN THIS DECISIONS THE CONSIDERATION PAID FOR (AND AND BUILDING WERE SEPARATE LY SHOWN AND HENCE, THE BENCH DECIDED THAT NO DEPRECIATION ON LAND IS TO BE ALLOWED. BUT THE BENCH ALSO EXPRESSED ITS OPINION THAT WHERE THERE IS NO DISTINCTION IN THE CONSID ERATION PAID FOR LAND AND BUILDING , THEN ENTIRE AMOUNT WOULD QUALIFY FOR DEPRECIATION. TH IS OPINION WAS IN THE NATURE OF OBITER DICTA AND IN THE VIEW OF DECISION QUOTED ABOVE, THE SAME IS NOT ACCEPTABLE. IT WAS DUTY OF THE APPELLANT TO ALLOCATE THE CONSIDERATION PAID FOR T HE PURCHASE OF OFFICE BUILDING TOWARDS THE LAND AND THE SUPER STRUCTURE. BUT THE APPELLANT HAD NOT DONE SO, AND THUS HAS CLAIMED DEPRECIATION ON THE VALUE OF THE LAND ALSO WHICH IS NOT AS PER LAW. 5.5 UNDER SUCH CIRCUMSTANCES, THE METHOD ADOPTED BY AO TOALLOCATE THE SALE CONSIDERATION AS WELL AS THE PURCHASE CONSIDERATION BETWEEN LAND AND BUILDING ON THE BASIS OF JANTRI RATES CANNOT BE FAULTED WITH. ALSO ASALREADY H ELD 'PROVISIONS OF SECTION 50C ARE APPLICABLE IN THE PRESENT CASE. THUS, THE LONG TERM CAPITAL GAIN COMPUTED BY THE AO ON SALE OF LAND IS UPHELD. ALSO THE AO SHOULD TAKE ACTION FOR THE YEARS IN WHICH THE APPE LLANTS HAS CLAIMED DEPRECIATION ON LAND AS PER LAW. 5.6 HENCE THE GROUND OF APPEAL IS DISMISSED. 15. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 16. LEARNED AUTHORISED REPRESENTATIVE SUBMITTED TH AT THE ASSESSEE HAD PURCHASED OFFICE BUILDING IN THE YEAR 1994 FOR A TOTAL SUM OF RS. 6,00,000. THE PAYMENT OF RS.6,00,000 WAS A CONSOLIDATED PAYMENT FOR LAND AND BUILDING FOR THE PROPERTY AS A ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 9 WHOLE. NO BIFURCATION WAS MADE TOWARDS CONSIDERATIO N FOR LAND AND CONSIDERATION FOR BUILDING AT THE TIME OF PURCHASE. SIMILARLY, THE AP PELLANT RECEIVED A CONSOLIDATED SUM OF RS.20,11,000 TOWARD SALE OF OFFICE BUILDING (PA GE 31 TO 35). SINCE THE PROPERTY AS A WHOLE WAS TRANSFERRED, THE APPELLANT REDUCED THE WDV OF BLOCK OF BUILDING BY THE SALE CONSIDERATION OF RS.20,11,000 (REFER PAGE 25 O F THE PAPER BOOK). THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT ARTIF ICIALLY BIFURCATED THE TRANSFER OF OFFICE BUILDING INTO TRANSFER OF LAND AND TRANSFER OF BUILDING.THE AO DURING THE COURSE OF ASSESSMENT WAS OF THE VIEW THAT THE CONSI DERATION FOR TRANSFER OF LAND SHOULD BE TAXED AS LONG TERM CAPITAL GAINS AND APPL IED THE PROVISIONS OF SECTION 50C. THE AO ACCORDINGLY COMPUTED THE SALE CONSIDERATION APPLYING SECTION 50C AT RS.39,03,346. SIMILARLY, THE AO ALSO APPLIED THE PR OVISIONS OF SECTION 50C TO SALE OF BUILDING AND REDUCED AN AMOUNT OF RS. 7,89,950 FROM THE WDV OF BUILDING. THE AO ALSO ARTIFICIALLY BIFURCATED THE PURCHASE CONSIDERA TION OF RS. 6,00,000 TO LAND AND BUILDING FOR COMPUTING CAPITAL GAINS ON SALE OF LAN D. IT IS RESPECTFULLY SUBMITTED THAT SINCE THE BEGINNING THE APPELLANT HAS BEEN TREATING THE OFFICE BUILDING AS A BLOCK OF ASSET, NO BIFURCATION WAS MADE BETWEEN THE LAND AND BUILDING SINCE INCEPTION. THE DEPARTMENT HAS ALLOWED DEPRECIATION IN ALL THE YEAR S ON THE OFFICE BUILDING AND THEREFORE THE BIFURCATION OF THE SAME INTO LAND AND BUILDING AT THE TIME OF SALE CANNOT BE DONE. THE APPELLANT DURING THE COURSE OF ASSESSM ENT AND APPEAL HAD CONTENDED THAT SINCE DEPRECIABLE ASSET WAS TRANSFERRED THE CA PITAL GAINS HAS TO BE COMPUTED AS PER SECTION 50 AND SECTION 50C CANNOT BE APPLIED. H OWEVER, THE ISSUE CONTENDED IS COVERED AGAINST THE APPELLANT BY THE DECISION OF MU MBAI SPECIAL BENCH IN CASE OF ITO V. UNITED MARINE ACADEMY 130 ITD 113 WHEREIN IT HAS BEEN HELD THAT SECTION 50C APPLIES TO DEPRECIABLE ASSET .THE APPELLANT RES ERVES IT RIGHT OF FURTHER APPEAL.IT MAY BE NOTED THAT AS PER SECTION 50C STAMP DUTY VAL UE HAS TO BE CONSIDEREDAS SALE CONSIDERATION FOR COMPUTING CAPITAL GAINS.THE SAME CANNOT APPLY TO SECTION 43(6)(C) WHEREIN IT HAS BEEN STATED THAT THE BLOCK OF ASSET SHOULD BE REDUCED BY THE MONEYS PAYABLE IN RESPECT OF ANY ASSET FALLING WITHIN THAT BLOCK WHICH IS SOLD OR DISCARDED ETC. 'MONEYS PAYABLE' IS DEFINED BY EXPLANATION TO SECTION 41(3) WHICH STATES THAT MONEYS PAYABLE IN RESPECT OF BUILDING, MACHINERY PL ANT OR FURNITURE INCLUDES THE PRICE ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 10 FOR WHICH IT IS SOLD. IN CASE OF THE APPELLANT THE AO HAS REDUCED THE BLOCK OF BUILDING BY AN AMOUNT OF RS. 7,89,950 WHICH REPRESENTS STAMP DUTY VALUE OF BUILDING WHICH IS NOT CORRECT. THE DECISION OF THE SPECIAL BENCH WOUL D NOT APPLY TO THIS EXTENT. 17. LEARNED AUTHORISED REPRESENTATIVE MADE ALTERNAT E PLEA BY SUBMITTING THAT WITHOUT PREJUDICE, IN CASE THE PROVISIONS OF SECTIO N 50C ARE MADE APPLICABLE IN THAT CASE THE AO MAY BE DIRECTED NOT TO BIFURCATE THE TR ANSFER OF OFFICE BUILDING INTO TRANSFER OF LAND AND TRANSFER OF BUILDING AND ACCOR DINGLY THE STAMP DUTY VALUE AS PER SECTION 50C MAY BE REDUCED FROM THE BLOCK OF ASSET OF BUILDING. 18. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTATI VE STRONGLY CONTENDED THAT THE ISSUES RAISED IN THIS APPEAL ARE COVER IN THE FAVOU R OF REVENUE BY THE SPECIAL BENCH DECISION OF ITAT MUMBAI BENCH IN THE CAE OF ITO VS. UNITED MARINE ACADEMY. DATED 25.04.2011. HE ALSO RELIED ON THE JUDGMENT OF HONBLE HIGH COURT OF ANDHRA PRADES IN THE CASE OF J. ANJANEYA SHARMA VS. COMMIS SIONER OF INCOME TAX(2014) (42 TAXMANN.COM 182) (ANDHRA PRADESH). 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD BEFORE US AND GONE THROUGH THE JUDGMENT REFERRED BY THE LD. DEPARTMENT AL REPRESENTATIVE. SHORT ISSUE RAISED IN THESEGROUND NO.2-5 RELATES TO SALE OF BUS INESS PREMISES WHICH AS PER ASSESSEE BEING A BUSINESS ASSETS WHICH IS SUBJECT T O DEPRECIATION AND SOLD FOR CONSIDERATION OF RS.20,11,000/- DO NOT COME WITHIN THE PURVIEW OF PROVISIONS OF SECTION 50C OF THE ACT AND NEEDS TO BE DIRECTLY DED UCTED FROM THE WRITTEN DOWN VALUE OF THE BUILDING. FURTHER LEARNED ASSESSING OFFICER TOOK A VIEW THAT BUSINESS PREMISES OF THE ASSESSE CONSISTS OF TWO COMPONENTS NAMELY LA ND AND BUILDING. CALCULATION OF FAIR MARKET VALUE (FMV) AS PER PROVISION OF SECTION 50C OF THE ACT HAS TO BE DONE IN ORDER TO CALCULATE THE LONG TERM/SHORT TERM CAPITAL GAIN. ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 11 20. LEARNED ASSESSING OFFICER ACCORDINGLY CALCULATE D FMV OF LAND ON THE BASIS OF INFORMATION FROM SUB REGISTRAR AND AFTER ALLOWING T HE BENEFIT OF INDEXED COST OF ACQUISITION OF LAND AT RS. 11,21,330/- (COST TAKEN AT RS. 4,99,011/-) COMPUTED LONG TERM CAPITAL GAIN AT RS. 27,82,016/-. LD. A.O. FURT HER CALCULATED THE FAIR MARKET VALUE OF THE BUILDING AT RS. 7,89,950/- AND REDUCED IT FR OM THE WRITTEN DOWN VALUE OF BLOCK OF ASSETS. IN SHORT LD. ASSESSING OFFICER HAS CALCULATED THE FAIR MARKET VALUE OF THE LAND AND BUILDING AT RS. 46,93,296/- AS AGAINST 20,11,000/- SHOWN BY THE ASSESSEE. 21. WE WILL FIRST TAKE UP THE ISSUE WHETHER PROVISI ONS OF SECTION 50CARE APPLICABLE ON THE BUSINESS ASSETS FOR ANALYZING WHICH IS ISSUE AFTER GOING THROUGH THE RELEVANT PROVISIONS OF SECTION 50, 50C OF THE ACT AND SECTI ONAND SECTION 2(14)(A) OF THE ACT. 22. WE FIND THAT SECTION 50 OF THE ACT SPECIFICALLY DEALS WITH THE PROVISIONS FOR COMPUTATION OF CAPITAL GAINS IN THE CASE OF DEPRECI ABLE ASSETS. AND PROVISIONS OF SECTION 50C APPLIES WHERE THE SALE CONSIDERATION RE CEIVED OR ACCRUING AS A RESULT OF THE TRANSFERBY AASSESSEE OF A CAPITAL ASSETS, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF S TATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFE R,THAN THE VALUE SO ADOPTED OR ASSESSED ,SHALL FOR THE PURPOSE OF SECTION 48 BE DE EMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING,AS A RESULT OF S UCH TRANSFER. 23. WE FURTHER OBSERVE THAT SECTION 50C APPLIES WHE N THERE IS TRANSFERRED BY AASSESSEE OF A CAPITAL ASSETS. NOW WHEN WE REFER TO THE DEFINITION OF CAPITAL ASSETS PROVIDED IN SECTION 2(14)(A) OF THE ACT, WE FIND TH AT IT INCLUDES A PROPERTY OF ANY KIND HELD BY AN ASSESSEE WHETHER OR NOT CONNECTED W ITH THE BUSINESS OR PROFESSION. THE DEFINITION OF CAPITAL ASSETS CLEARLY SHOWS THAT IT INTER ALIA INCLUDES ASSETS CONNECTED WITH THE BUSINESS OR PROFESSION. WHEN WE READ SECTION 50C WITH RESPECT TO SECTION 2(14)(A) OF THE ACT, WE COME TO THE CONCLUS ION THAT SECTION 50C EQUALLY APPLIES ON THE CAPITAL ASSETS HELD FOR BUSINESS PUR POSES AND THEREFORE LD. ASSESSING ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 12 OFFICER HAS RIGHTLY APPLIED THE PROVISIONS OF SECTI ON 50C OF THE ACT ON THE TRANSACTION OF SALE OF LAND AND BUILDING BY THE ASSESSEE DURING THE YEAR. 24. IN ORDER TO SUPPORT OUR VIEW WE FIND IT PERTINE NT TO OBSERVETHE DECISION OF SPECIAL BENCH IN THE CASE OF ITO VS. UNITED MARINE ACADEMY(SUPRA) WHEREIN SIMILAR FACTS WERE THERE BEFORE THE SPECIAL BENCH FOR ADJUD ICATION IN WHICH ASSESSEE SOLD OFFICE BUILDING AND DEPRECIATION WAS BEING CLAIMED REGULARLY SINCE LAST MANY YEARS. FURTHER DURING THE COURSE OF ASSESSMENT ASSESSING O FFICER AFTER NOTICING THAT THE VALUE OF PROPERTY AS PER STAMP DUTY VALUATION IS RS . 76,49,000/-, APPLIED PROVISIONS OF SECTION 50C AND CALCULATED SHORT TERM CAPITAL GAIN ACCORDINGLY. SPECIAL BENCH HELD AS UNDER:- THE MAIN ISSUE FOR CONSIDERATION IN THE INSTANT CASE WAS AS TO WHETHER IN A CASE WHERE CAPITAL GAIN ARISING FROM THE TRANSFER OF DEPRECIABLE ASSET IS COM PUTED AS PER THE SPECIAL PROVISIONS CONTAINED IN SECTION 50, THE PROVISIONS OF SECTION 50C CAN B E APPLIED SO AS TO ADOPT THE VALUE ASSESSED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY TO BE T HE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. (PARA 11) THERE ARE TWO DEEMING FICTIONS CREATED IN SECTION 50 AND SECTI ON 50C. THE FIRST DEEMING FICTION MODIFIES THE TERM 'COST OF ACQUISITION ' USED IN SECTION 48 FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS ARISING FROMTRANSFER OF DEPRECIABLE ASSETS WHERE AS THE DEEMING FICTION CREATED IN SECTION 50C MODIFIES THE TERM 'FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF THE CAPITAL ASSET' USED IN SECTION 48 FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS ARISING FROM THE TRANSFER OF CAPITAL ASSET BEING LAND OR BUILDING OR BOTH. THE DEEMING FICTION CREATED IN SECTION 50C THUS OPERATES IN A SPECIFIC FIELD WHICH IS DIFFERENT FROM THE FIELD IN WHICH SECTION 50 IS APPLICABLE. IT WAS T HUS NOT A CASE WHERE ANY SUPPOSITION HAD BEEN SOUGHT TO BE IMPOSED ON OTHER SUPPOSITION OF LAW. THERE ARE TWO DIFFERENT FICTIONS CREATED INTO TWO DIFFERENT PROVISIONS AND GOING BY THE LEGISLATIVE INTENTIONS TO CREATE THE SAID FICTIONS, THE SAME OPERATE IN DIFFERENT FIE LDS. THE HARMONIOUS INTERPRETATION OF THE RELEVANT PROVISIONS MAKES IT CLEAR THAT THER E IS NO EXCLUSION OF APPLICABILITY OF ONE FICTION IN A CASE WHERE OTHER FICTION IS APPLIC ABLE. AS A MATTER OF FACT, THERE IS NO CONFLICT BETWEEN THESE TWO LEGAL FICTIONS WHICH OPERAT E IN DIFFERENT FIELDS AND THEIR APPLICATION IN A GIVEN CASE SIMULTANEOUSLY DOES NOT RESULT IN IMPOSITION OF SUPPOSITION ON OTHER SUPPOSITION OF LAW. THE ASSESSING OFFICER THUS WAS RIGHT IN APP LYING THE PROVISION OF SECTION 50C TO THE TRANSFER OF DEPRECIABLE CAPITAL ASSETS COVERED BY SECTION 50 AND IN COMPUTING THE CAPITAL GAIN ARISING FROM THE SAID TRANSFER ADOPTING THE STAMP DUTY VALUATION. [PARA 20] ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 13 25. FURTHER SIMILAR TYPE OF ISSUE WAS ALSO ADJUDICA TED BY THE HONBLE COURT OF ANDHRA PRADESH IN THE CASE OF J. ANJANEYA SHARMAM (SUPRA) AND IT WAS HELD AS UNDER:- IF SUB-SECTION (1) OF SECTION 50C IS ANALYZED IT WOULD APPEAR THAT THERE M UST BE A TRANSFER OF A CAPITAL ASSET, WHICH MEANS, THE LAND OR BUILDING OR BOTH. THE CONSIDERATION RECEIVED OR ACCRUED ON THE TRANSFER IS LESS THAN THE VAL UE ADOPTED OR ASSESSED OR ASSESSABLE BY AN AUTHORITY OF THE STATE GOVERNMENT ON WHICH THE STAMP DUTY IS PAID. IF THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY IS MORE THAN THE CONSIDERATION RECEIVED, THEN SUCH VALUE HAS TO BE TREATED AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUED FOR THE PURPOSE OF SECTION 48. [PARA 5] THUS, IT APPEARS THAT THERE IS SCOPE FOR ACCEPTING THE VALUATION OF THE LAND IN CASE OF THE VACANT LAND ALONE AND THE VALUATION OF THE BUILDING IN CASE OF THE BUILDING ONLY OR IN CASE OF LAND AND BUILDING BOTH. THUS, THE VALUATION HAS TO BE ADOPTED IN CASE OF TRANSFER OF LAND AND BUILDING TOGETHER JOINTLY AND NOT SEPARATELY. SUB-SECTION (2) OF SECTION 50C HAS TO BE READ WITHOUT AFFECTING THE APPLICABILITY OF SUB-SECTION (1). SIMILARLY, SUB-SECTION (3) HAS TO BE READ SUBJECT TO SUB-SECTION (2). W HERE THE APPLICABILITY OF SUB-SECTION (2) WILL MILITATE AGAINST SUB-SECTION (1) , SUB-SECTION (1) HAS TO BE APPLIED IGNORING SUB-SECTION (2). WHERE SUB-SECTION (1) IS APPLIC ABLE WHOLLY AND IT IS APPLIED, THERE IS NO SCOPE FOR APPLYING SUBSECTION (2). [PARA 6] THEREFORE, THE APPEAL WAS TO BE DISMISSED . 26. FROM GOING THROUGH THE ABOVE JUDGMENT RELIED ON BY THE LD. DEPARTMENTAL REPRESENTATIVE WE INFER THAT PROVISION S OF SECTION 50C OF THE ACT CLEARLY APPLIES ON THE ASSETS HELD FOR BUSINESS PUR POSE. THEREFORE LD. ASSESSING OFFICER HAS RIGHTLY APPLIED THE PROVISIONS OF SECTI ON 50C ON THE IMPUGNED TRANSACTIONS. 27. NOW, THE NEXT QUESTION BEFORE US IS WHETHER T HE IMPUGNED TRANSACTION OF SALE OF OFFICE PREMISES HAS TO BE BIFURCATED BET WEEN THE LAND AND BUILDING SO ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 14 THAT LONG TERM/SHORT TERM CAPITAL GAIN CAN BE CALCU LATED FOR THE SALE OF LAND AND SEPARATE CALCULATION OF SHORT TERM CAPITAL GAIN/LOS S U/S.50 OF THE ACT FOR SALE OF BUILDING STRUCTURE BEING DEPRECIABLE ASSET. 28. WE ARE OF THE CONSIDERED OPINION THAT LAND BEIN G A NON DEPRECIABLE ASSET, THE GAIN ON SALE OF THIS CAPITAL ASSETS I.E. LAND , HELD FOR MORE THAN THREE YEARS IS TO BE TAXED UNDER THE HEAD LONG TERM CAPITAL GAIN O NLY AND CANNOT BE ADDED TO BUILDING AS PART OF DEPRECIABLE ASSET. THEREFORE LD . ASSESSING OFFICER HAS RIGHTLY CALCULATED THE LONG TERM CAPITAL GAIN OF RS . 27, 82,016/- AFTER GIVING BENEFIT OF INDEXATION OF THE COST OF LAND. LEARNED CIT(A) HAS ALSO CONFIRMED THE ACTION OF ASSESSING LONG TERM CAPITAL GAIN OF R S.27,82,016/- ON SALE OF LAND. 29. AS FAR AS SHORT TERM CAPITAL GAIN/LOSS ON THE B UILDING STRUCTURE IS CONCERNED, WE OBSERVE THAT ASSESSEE HAS MERELY PLAC ED THE COPY OF POSSESSION LETTER AND AGREEMENT TO AT PAGE 31 TO 35 OF THE PA PER BOOK REGARDING SALE OF THE IMPUGNED PROPERTY WHICH IS A DUPLEX BUNGLOW AT A-1, MARS CO-OPERATIVE HOUSING SOCIETY LTD. MEASURING 2100 SQUARE FEET WIT H THE CONSTRUCTION OF 1700 SQUARE FEET. THERE IS NO BIFURCATION OF THE LA ND AND BUILDING AND THE AGREED CONSIDERATION IS FOR TOTAL STRUCTURE INCLUDI NG THE LAND. THEREFORE IT IS UNDISPUTED THAT THERE IS NO SUFFICIENT INFORMATION GIVEN ON THE PART OF THE APPELLANT ABOUT THE SEPARATE COST INCURRED AND SAL E CONSIDERATION RECEIVED FOR LAND AND BUILDING AS WELL AS SALE CONSIDERATION REC EIVED FOR LAND AND BUILDING.THEREFORE WE FIND NO MISTAKE IN THE ORDER OF LEARNED ASSESSING OFFICER TAKING THE FAIR MARKET VALUE OF THE BUILDING AT RS. 7,89,950/- AND GIVING ITS SET OFF AGAINST THE WDV OF THE BLOCK OF ASSET. WE THER EFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF LEARNED CIT(A) RELATING TO THIS ISSUE. WE ALSO UPHOLD THE FINDING OF LEARNED CIT(A) DIRECTING THE ASSESSI NG OFFICER TO TAKE ACTION FOR THE YEARS IN WHICH THE APPELLANTS HAS CLAIMED D EPRECIATION ON LAND AS PER LAW . IN THE RESULT GROUND 2,3,4& 5 OF THE ASSESSEE ARE D ISMISSED. ITA NO. 2275/AHD/2012 SHANKAR KAPDANIRYATPVT LTD VS. ITO AY : 2009-10 - 15 30. AS REGARDS ALTERNATE PLEA TAKEN BY THE ASSESSEE , WE FIND NO BASIS IN THIS PLEA AS WE HAVE ALREADY HELD THAT CAPITAL GAIN IS T O BE SEPARATELY CALCULATED FOR A LAND AND BUILDING. CAPITAL GAIN ON LAND WILL BE TAXABLE AS LONG TERM CAPITAL GAIN AND ONLY THE GAIN/LOSS ON BUILDING WILL BE CAL CULATED U/S. 50C OF THE ACT AND THEREFORE WE DISMISS THE ALTERNATE PLEA OF THE ASSESSEE. 31. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 12 TH , MAY 2017 AT AHMEDABAD. S SSSS ( SHRI S.S. GODARA ) JUDICIAL MEMBER (SHRI MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED 12/05/2017 !/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. '#'$% & / CONCERNED CIT 4. & ) ( / THE CIT(A)- 5. )* $% , $%+ , ,-. /DR,ITAT, AHMEDABAD, 6. */0 1 / GUARD FILE. / BY ORDER, TRUE COPY 2 ', (ASSTT.REGISTRAR) $%+ ITAT, AHMEDABAD