Income-tax Officer, V. Yeshwant Engineering Pvt. Ltd., Pune

ITA 918/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7412 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Assessee Lawyers: SHARD A VAZE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Additional evidence; Cost of acquisition
• Section: 143(3); 50C; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 782 /P U N/20 1 5 / ASSESSMENT YEAR : 20 10 - 11 YESHWANT ENGINEERING PVT. LTD., 101, TEJAS, PAWANA NAGAR, CHINCHWAD, PUNE 411033 . / APPELLANT PAN: AAACY0686K VS. THE INCOME TAX OFFICER, WARD 10(1), PUNE . / RESPONDENT . / ITA NO. 918 /P U N/20 15 / ASSESSMENT YEAR : 2010 - 11 THE INCOME TAX OFFICER, WARD 10(1), PUNE . / APPELLANT VS. YESHWANT ENGINEERING PVT. LTD., 101, TEJAS, PAWANA NAGAR, CHINCHWAD, PUNE 411033 . / RESPONDENT PAN: AAACY0686K ASSESSEE BY : SHRI SHARD A VAZE REVENUE BY : SHRI VIVEK AGGARWAL / DATE OF HEARING : 1 2 .0 7 .2017 / DATE OF PRONOUNCEMENT: 09 . 1 0.2017 2 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 / ORDER PER SUSHMA CHOWLA, JM: THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE AGAINST ORDER OF CIT(A), PUNE - 6, DATED 2 7 .0 3 .201 5 RELATING TO ASSESSMENT YEAR 20 10 - 11 AGAINST ORDER PASSED UNDER SECTION 143(3) OF INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO. 782 /PUN/201 5 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF THE LAW IT BE HELD THAT, THE ASSESSING OFFICER HAS ERRED IN TAXING THE AMOUNT OF RS.98 , 52,520 AS SHORT TERM CAPITAL GAINS ON TRANSFER OF BUILDING CONSTRUCTED ON A LEASEHOLD LAND OWNED BY M I DC A STATE GOVT AUTHORITY ALONG WITH LEASEHOLD RIGHTS IN THE SAID LAND BY APPLYING PROVISIONS OF SECTION 50C AS AGAINST SHORT TERM CAPITAL GAIN OF RS.NIL DECLARED AND ADMITTED BY THE APPELLANT UNDER THIS HEAD FOR THE A.Y. 2010 - 11. THE ACTION OF THE ASSESSING OFFICER BE HELD AS ERRONEOUS, UNJUSTIFIED AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT FURTHER BE HELD THAT THE DECISION OF THE FI RST APPELLATE AUTHORITY CONFIRMING THE DECISION OF THE ASSESSING OFFICER ON THIS ISSUE IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. 2. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER THE PROVISIONS OF THE LAW IT BE HELD THAT, THE ASSESSING OFFICER HAS ERRED IN APPRECIATING FACTS THAT BUILDING IS PART AND PARCEL OF LAND APPURTENANT TO IT AND CANNOT BE SOLD SEPARATELY WITHOUT SPECIFIC PERMISSION FROM M I DC. IT FURTHER BE HELD THAT THE DECISION OF THE FIRST APPELLATE AUT HORITY CONFIRMING THE DECISION OF THE ASSESSING OFFICER ON THIS ISSUE IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. 3. THE APPELLANT BE GRANTED STAY OF IMPUGNED DEMAND TILL THE DECISION OF THE APPEAL, IN THE ALTERNATIVE THE APPEAL BE TAKEN FOR ADJUDICATION FOR EARLY HEARING. 3 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 4. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS OF APPEAL WHICH READ AS UNDER: - GROUND NO.4 WITHOUT PREJUDICE AND IN ANY EVENT, LEARNED ASSESSING OFFICER (AO) BE DIRECTED TO APPLY THE RATE OF TAX APPLICABLE TO LONG TERM CAPITAL GAINS INSTEAD OF SHORT TERM GAINS WHILE COMPUTING CAPITAL GAINS TAX LIABILITY CONCERNING DEPRECIABLE ASSETS ADVERTED TO IN ORIGINAL GROUND NO.1 GROUND NO.5 THE AFORESAID ADDITIONAL GROUND OF APPEAL IS WITHOUT PREJUDICE TO THE ORIGINAL GROUNDS OF APPEAL. 5. THE REVENUE IN ITA NO.918/PUN/2015 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE U/S 50C HOLDING THAT THE SAID SECTION WAS NOT APPLICABLE TO LEASEHOLD PROPERTY? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO TREAT RENTAL INCOME FROM HOUSE PROPERTY AS INCOME FROM OTHER SOURCES WITHOUT CONSIDERING THAT THE AGREEMENT WAS A LEAVE AND LICENSE AGREEMENT OF A RESIDENTIAL PROPERTY? 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDERS OF AUTHORITIES BELOW IN TAXING SUM OF RS.98,52,520/ - AS SHORT TERM CAPITAL GAINS ON TRANSFER OF BUILDING CONSTRUCTED ON LEASEHOLD LAND OWNED BY MIDC APPLYING PROVISIONS OF SECTION 50C OF THE ACT AS AGAINST SHORT TERM CAPITAL GAINS OF NIL DECLARED BY THE ASSESSEE. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN DELETIN G THE ADDITION MADE UNDER SECTION 50C OF THE ACT HOLDING THAT SUCH SECTION WAS NOT APPLICABLE TO LEASEHOLD PROPERTY. THE ISSUE IN GROUND OF APPEAL NO.2 RAISED BY 4 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN DIRECTING THE ASSESSING OFFICER TO TREAT RENTA L INCOME FROM PROPERTY AS INCOME FROM OTHER SOURCES. 8. THE ASSESSEE BEFORE US HAS ALSO RAISED ADDITIONAL GROUNDS OF APPEAL ON WITHOUT PREJUDICE BASIS THAT THE ASSESSING OFFICER BE DIRECTED TO APPLY THE RATE OF TAX APPLICABLE TO LONG TERM CAPITAL GAINS IN STEAD OF SHORT TERM CAPITAL GAINS WHILE COMPUTING THE LIABILITY ON ACCOUNT OF CAPITAL GAINS IN RESPECT OF DEPRECIABLE ASSETS. 9. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.13,520/ - . THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF AUTOMOBILE PARTS AND COMPONENTS. THE ASSESSEE HAD STOPPED PRODUCTION FROM THE YEAR 2004. THE ASSESSEE WAS RECEIVING PROFITS ON SALE OF SHARES. THE ASSESSEE HAD SO LD PROPERTY SITUATED AT PLOT NO.70 IN F.II, BLOCK OF PIMPRI INDUSTRIAL AREA, BHOSARI, PUNE, TO M/S.JAPTECH INDUSTRIES FOR TOTAL CONSIDERATION OF RS.70 LAKHS. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO FURNISH T HE DETAILS OF IMMOVABLE PROPERTY SOLD. THE ASSESSING OFFICER FROM THE SALE DEED AT PAGE 5 AND AS PER INDEX II NOTED THAT THE STAMP VALUATION AUTHORITY HAD FIXED THE PRICE OF PROPERTY AT RS.2,71,89,700/ - FOR THE PURPOSE OF STAMP DUTY; ACCORDING TO WHICH, S TAMP DUTY WAS PAID. HOWEVER, THE ASSESSEE IN THE COMPUTATION OF INCOME FOR THE INSTANT ASSESSMENT YEAR HAD TAKEN THE SALE PRICE OF PROPERTY AT RS.70 LAKHS FOR COMPUTING CAPITAL GAINS ON THE SAID TRANSACTION. THE ASSESSING OFFICER IN THIS REGARD ISSUED SH OW CAUSE NOTICE TO THE ASSESSEE. THE FIRST ISSUE WHICH WAS RAISED IN THE SHOW CAUSE NOTICE WAS THE STAMP DUTY VALUATION ADOPTED BY THE 5 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 STAMP DUTY VALUATION AUTHORITIES AND WHY THE SAME SHOULD NOT BE ADOPTED IN VIEW OF SECTION 50C OF THE ACT, FOR THE PURPO SE OF COMPUTING CAPITAL GAINS IN THE HANDS OF ASSESSEE. FURTHER, THE ASSESSING OFFICER ALSO NOTED THAT THE VALUATION OF BUILDINGS AND STRUCTURES CANNOT BE TAKEN AT RS.1,00,39,700/ - . THE ASSESSEE WAS ASKED AS TO WHY SALE CONSIDERATION SHOULD NOT BE TAKEN AT THE SAID FIGURE FOR THE BUILDING STRUCTURE FOR COMPUTING SHORT TERM CAPITAL GAINS AS PER SECTION 50A OF THE ACT SINCE THE SAID ASSET WAS DEPRECIABLE ASSET. ANOTHER ISSUE WHICH WAS RAISED WAS THE COMPUTATION OF INCOME UNDER THE HEAD INCOME FROM BUSINES S OR INCOME FROM PROPERTY AND AS TO WHY THE EXPENSES CLAIMED UNDER THE HEAD BUSINESS SHOULD NOT BE DISALLOWED IN THE HANDS OF ASSESSEE. THE ASSESSEE FURNISHED ITS SUBMISSIONS IN THIS REGARD. THE ASSESSEE EXPLAINED THAT AGREEMENT TO ASSIGN WITH M/S. JAP TECH INDUSTRIES WAS EXECUTED ON 15.09.2005 AND THE TOTAL CONSIDERATION AGREED UPON WAS RS.70 LAKHS. HOWEVER, SINCE THE PROPERTY WAS LEASEHOLD PROPERTY, THE SAME COULD NOT BE SOLD DIRECTLY TO M/S. JAPTECH INDUSTRIES, WITHOUT PRIOR APPROVAL OF MIDC. HE FURTHER POINTED OUT THAT THE DATE OF EXECUTION OF DEED OF ASSIGNMENT WAS DATED 31.03.2010 AND ON THAT DATE, THE STAMP DUTY VALUE IN RESPECT OF THE SAID PROPERTY WAS ASSESSED AT RS.2.71 CRORES. THE ASSESSEE VEHEMENTLY POINTED OUT THAT THE PROVISIONS OF SEC TION 50C OF THE ACT WERE INAPPLICABLE TO THE LEASEHOLD PROPERTY. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD EXECUTED AGREEMENT TO ASSIGN IN 2005 BUT HAD CLAIMED DEPRECIATION UPTO LAST YEAR AND NO POSSESSION WAS GIVEN. THE ASSESSEE HAD TRANSFERRED THE PROPERTY BY DEED OF ASSIGNMENT WHICH WAS MADE AND EXECUTED AND ENTERED ON 31.03.2010. THE ASSESSEE HAD ALSO OFFERED INCOME FROM CAPITAL GAINS ON SALE OF BUILDING AND LAND DURING THE YEAR UNDER CONSIDERATION AND HAD ALSO CLAIMED EXEMPTION UNDER SECTION 54EC OF THE ACT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HA D NOWHERE DISPUTED THAT THE PROVISIONS OF SECTION 50C 6 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 OF THE ACT WERE NOT APPLICABLE. CONSEQUENTLY, THE INCOME WAS COMPUTED IN THE HANDS OF ASSESSEE AS INCOME FROM LONG TERM CAPITAL GAINS , WHEREIN THE SALE CONSIDERATION WAS ADOPTED AT RS.1,71,50,000/ - AFTER DEDUCTING INDEXED COST OF ACQUISITION OF PLOT OF LAND AND AFTER GIVING BENEFIT OF INVESTMENT MADE UNDER SECTION 54EC OF THE ACT AT RS.50 LAKHS ; THE LONG TERM CAPITAL GAINS WERE WORKED OUT AT RS.1,12,15,612/ - . THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAD SOLD THE LAND AND FACTORY BUILDING AND THE FACTORY BUILDING WAS DEPRECIABLE ASSET. THEREFORE, THE PROVISIONS OF SECTION 50 OF THE ACT FOR COMPUTING CAPITAL GAINS WERE TO B E APPLIED. THE ASSESSEE HAD COMPUTED THE SHORT TERM CAPITAL GAINS ON BUILDING BEING DEPRECIABLE ASSETS. HOWEVER, WHILE COMPUTING CAPITAL GAINS, THE ASSESSEE HAD TAKEN ACTUAL SALE CONSIDERATION INSTEAD OF VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE BUILDING STRUCTURE AT RS.1,00,39,700/ - . THE ASSESSEE WAS ASKED AS TO WHY CAPITAL GAINS SHOULD NOT BE TAXED IN VIEW OF PROVISIONS OF SECTION 50C OF THE ACT. THE ASSESSING OFFICER THUS, ADOPTED THE SALE CONSIDERATION AS PER SECTION 50C OF THE ACT AT R S.1,00,39,700/ - AND AFTER DEDUCTING WDV AT RS.1,87,280/ - , TAXED THE BALANCE OF RS.98,52,520/ - AS SHORT TERM CAPITAL GAINS. FURTHER, WHERE THE ASSESSEE HAD RECEIVED RENT OF RS.1,08,000/ - , SAME WAS ADDED IN THE HANDS OF ASSESSEE AS INCOME FROM HOUSE PROPER TY. 10. IN APPEAL, THE CIT(A) NOTED THAT THE ASSESSEE HAD LET OUT ITS FACTORY SHED THOUGH IN THE AGREEMENT, THE PROPERTY WAS SHOWN AS RESIDENTIAL BUT THE FACT WAS IT WAS FACTORY SHED AND THE SAME COULD NOT BE TREATED AS RESIDENTIAL PROPERTY WHICH IS BECA USE IT IS SO MENTIONED IN THE AGREEMENT. THUS, THE ACTION OF ASSESSING OFFICER IN TREATING THE RENTAL INCOME AS HOUSE PROPERTY INCOME WAS NOT UPHELD BY THE CIT(A). THE ASSESSING OFFICER IS DIRECTED TO TREAT THE RENTAL 7 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 INCOME AS INCOME FROM OTHER SOURCES AS CLAIMED BY THE ASSESSEE. THE ASSESSEE WAS ALSO ENTITLED TO CLAIM DEPRECIATION ON THE SAME. IN RESPECT OF THE ISSUE ON CAPITAL GAINS ARISING IN THE FACTS OF THE ASSESSEE, THE CIT(A) NOTED THAT IN THE PRESENT CASE, WHERE THE ASSESSEE HAD DISPUTED THE VALUATION OF STAMP VALUATION AUTHORITY, REFERENCE SHOULD BE MADE TO THE VALUATION OFFICER AS PER SECTION 50C(3)(A) OF THE ACT. HOWEVER, THE ASSESSING OFFICER HAD NOT MADE THE SAID REFERENCE. HE FURTHER WENT ON TO HOLD THAT WHERE THE IMPUGNED PROPERTY WAS LEASEHOLD PROPERTY, THEN AS PER THE DECISION OF PUNE BENCH OF TRIBUNAL IN KANCAST PVT. LTD. VS. ITO IN ITA NO. 1215/PN/2011 , ORDER DATED 19.01.20 1 5, PROVISIONS OF SECTION 50C OF THE ACT WE RE NOT APPLICABLE TO THE LEASEHOLD PROPERTY. IT WAS NOTED THAT IN T HE FACTS OF THE CASE BEFORE THE TRIBUNAL, THE ISSUE WAS IN RESPECT OF LEASEHOLD PLOT OF MIDC, AS IN THE CASE OF ASSESSEE AND IT WAS HELD THAT PROVISIONS OF SECTION 50C OF THE ACT WERE NOT APPLICABLE. THE OPERATIVE PORTION OF THE ORDER OF TRIBUNAL IS REPRO DUCED UNDER PARA 7 AT PAGES 9 AND 10 OF THE APPELLATE ORDER. IN VIEW THEREOF, THE ASSESSING OFFICER WAS DIRECTED TO CALCULATE THE CAPITAL GAINS WITHOUT APPLYING PROVISIONS OF SECTION 50C OF THE ACT AND DELETE THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPI TAL GAINS OF RS.1,12,00,000/ - . IN RESPECT OF SHORT TERM CAPITAL GAINS, THE ADDITION OF RS.98,52,520/ - IN RESPECT OF BUILDING WAS UPHELD BY THE CIT(A). 11. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE UNDER SECTION 5 0C OF THE ACT ON THE GROUND THAT THE SAID LAND WAS LEASEHOLD PROPERTY AND HENCE, THE PROVISIONS OF SAID SECTION WERE NOT APPLICABLE. FURTHER, VIDE GROUND OF APPEAL NO.2, THE REVENUE IS AGGRIEVED BY TREATING THE RENTAL INCOME AS OTHER SOURCES AND AS NOT FR OM PROPERTY INCOME. 8 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 12. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN UPHOLDING THE ADDITION ON ACCOUNT OF BUILDING STRUCTURE AS SHORT TERM CAPITAL GAINS. THE ASSESSEE ON WITHOUT PREJUDICE BASIS HAS RAISED THAT IN CASE THE CAPITAL GAINS ON A CCOUNT OF DEPRECIABLE ASSETS IS TO BE ASSESSED IN THE HANDS OF ASSESSEE, THEN THE RATE OF TAXES APPLICABLE TO LONG TERM CAPITAL GAINS BE APPLIED. 13. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE WAS A PRIVATE LIMITED COMPANY AND HAD TAKEN THE LAND ON LEASE FROM MIDC. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO SELL ON 15.09.2005 FOR SALE OF SAID LEASEHOLD LAND FOR RS.70 LAKHS AND COPY OF SALE AGREEMENT IS PLACED AT PAGES 1 TO 13 OF THE PAPER BOOK. HE FURTHER POINTED OUT THAT ON 19.09.2006, AN APPLICATION WAS MADE BEFORE MIDC FOR PERMISSION TO TRANSFER THE SAID LAND. THE PERMISSION WAS GIVEN BY MIDC ON 08.02.20 10 AND THE FINAL SALE DEED WAS EXECUTED ON 31.03.2010, COPY OF WHICH IS PLACED AT PAGES 14 TO 26 OF THE PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT ON THE VALUE OF LAND AS ON 31.03.2010. FURTHER, THE ASSESSEE HAD SOLD THE SAID LAND ON 15.09.2005. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE CIT(A) GAVE THE BENEFIT OF NOT APPLYING THE PROVISIONS OF SECTION 50C OF TH E ACT FOR THE VALUE OF LAND BUT NOT FOR THE BUILDING. HE REFERRED TO THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. GREENFIELD HOTELS & ESTATES PVT. LTD. (2016) 389 ITR 68 (BOM) , WHEREIN IT HAS BEEN HELD THAT THE PROVISIONS OF SECTION 50C OF THE ACT WERE NOT ATTRACTED ON TRANSFER OF LAND AND BUILDING BEING LEASEHOLD. HE POINTED OUT THAT BUILDING WAS ON THE LEASEHOLD LAND AND ANYTHING TO DO WITH THE BUILDING, PERMISSION WAS NEEDED. HE FURTHER REFERRED TO THE ADDITIONAL EVIDENCE FILED I.E. LEAS E DEED AND 9 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 TERMS THEREOF, COPY OF WHICH IS PLACED AT PAGES 75 TO 86 OF THE PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT EVEN TO GIVE THE BUILDING ON RENT, PRIOR PERMISSION WAS REQUIRED FROM MIDC AND ALSO RULES AND REGULATIONS AS APPLICABLE TO THE LAND WERE APPLICABLE TO THE BUILDING. HE THUS, EMPHASIZED THAT PROVISIONS OF SECTION 50C OF THE ACT WERE NOT ATTRACTED ON BUILDING VALUE. IN THIS REGARD, HE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE MUMBAI BENCH OF TRIBUNAL IN ACIT VS. RICOH INDIA LTD. (2015) 44 CCH 175 (MUM - TRIB) , WHEREIN IN THE FACTS OF SAID CASE ALSO, THE BUILDING WAS ON MIDC LAND. HE THEN REFERRED TO ADDITIONAL GROUND OF APPEAL RAISED. IN ALTERNATE, IF THE COMPUTATION NEEDS TO BE UPHEL D UNDER SECTION 50C OF THE ACT, BUT THE RULES OF TAX AS OF LONG TERM CAPITAL GAINS WE RE TO BE APPLIED. IN THIS REGARD, HE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE MUMBAI BENCH OF TRIBUNAL IN M/S. PODDAR BROTHERS INVESTMENT PVT. LTD. VS. DCIT IN ITA N O.1114/MUM/2013, RELATING TO ASSESSMENT YEAR 2006 - 07, ORDER DATED 25.03.2015 AND M/S. SMITA CONDUCTORS LTD. VS. DCIT IN ITA NO.4004/MUM/2011, RELATING TO ASSESSMENT YEAR 2006 - 07, ORDER DATED 17.09.2013 . 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACING RELIANCE ON THE ORDERS OF AUTHORITIES BELOW POINTED OUT THAT EVEN ON THE LAND OF MIDC, THE PROVISIONS OF SECTION 50C OF THE ACT ARE TO BE APPLIED. HE REFERRED TO THE RATIO LAID DOWN BY THE MUMBAI BENCH OF TRIBUNAL IN SHAVO NORGREN (P) LTD. VS. DCIT IN ITA NO.8101/MUM/2011, RELATING TO ASSESSMENT YEAR 2008 - 09, ORDER DATED 14.12.2012 . HE THEN, POINTED OUT THAT VIDE THE SAID DECISION, THE TRIBUNAL HELD THAT PROVISIONS OF SECTION 50C OF THE ACT WE RE ATTRACTED IN THE CASE OF BUILDING ALSO SINCE BOTH THE LAND AND BUILDING WERE ASSIGNED BY THE SAID DEEDS. HE FURTHER REFERRED TO THE RATIO LAID DOWN BY THE LUCKNOW BENCH OF TRIBUNAL IN 10 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 ITO VS. SHRI HARI OM GUPTA IN ITA NO.222/LKW/2013, RELATING TO ASSESSMENT YEAR 2007 - 08, ORDER DATED 11.04.2014 FOR THE PROPOSITION THAT IN RESPECT OF LEASEHOLD RIGHT FOR 99 YEARS FOR LAND BEING A CAPITAL ASSET, THEN PROVISIONS OF SECTION 50C OF THE ACT WERE APPLICABLE. HE FURTHER RELIED ON THE DECISION OF DELHI BENCH OF TRIBUNAL IN ITO VS. SH. CHANDER SHEKHAR IN ITA N O.430/DEL/2013, RELATING TO ASSESSMENT YEAR 2009 - 10, ORDER DATED 05.06.2017 FOR THE SAME PROPOSITION. HE POINTED OUT THAT THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE IS AGAINST TAX RATES TO BE APPLIED ON THE CAPITAL GAINS ARISING THEREFROM I.E. ON THE DEEMED SHORT TERM CAPITAL GAINS. IN RESPECT OF GROUND OF APPEAL NO.2 RAISED BY THE REVENUE, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSING OFFICER VIDE PARA 6 HAD HELD THE INCOME TO BE INCOME FROM PROPERTY. HOWEVER, THE CIT(A) HELD IT TO BE AS INCOME FROM OTHER SOURCES. HE FURTHER POINTED OUT THAT THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AGAINST THE ORDER OF CIT(A) IN ALLOWING THE CLAIM OF DEPRECIATION. 15. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REJOINDER POINTED OUT THAT THE FACTORY PREMISES ALONG WITH MACHINERY WERE ON RENT, HENCE, THE SAME NEEDS TO BE ASSESSED AS INCOME FROM OTHER SOURCES. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PR ESENT CASE, THE ASSESSEE WAS RUNNING FACTORY WHICH CLOSED OPERATIONS IN 2004. THE ASSESSEE HAD SHOWN THE SAID LAND AND BUILDING AS ITS ASSET IN THE LIST OF FIXED ASSETS AND HAD ALSO CLAIMED THE DEPRECIATION ON THE SAID ASSET OF BUILDING. THE ASSESSEE CLA IMS THAT IT HAD ACQUIRED THE SAID LAND ON LEASE FROM MIDC, COPY OF LEASE DEED IS PLACED AT PAGES 68 TO 91 OF THE PAPER BOOK. THE LEASE WAS FOR PERIOD OF 95 YEARS, UNDER WHICH ADMITTEDLY, THE ASSESSEE DID NOT 11 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 HAVE THE RIGHT TO ERECT ANY BUILDING OR ERECTIO N OF STRUCTURE ON ANY PORTION OF LAND EXCEPT IN ACCORDANCE WITH THE SAID BUILDING REGULATIONS. THERE WAS ALSO AN EMBARGO ON THE ASSESSEE NOT TO CARRY OUT ALTERNATIONS OR ADDITIONS AT ANY POINT OF TIME. THE ASSESSEE ADMITTEDLY, HAD TO TAKE THE CONSENT OF CHIEF EXECUTIVE OFFICER BEFORE LETTING OUT THE SAID PREMISES OR FOR THAT MATTER, DOING ANYTHING WITH THE SAID PREMISES. THE SCHEDULE ALSO PROVIDED THAT THE LAND SHALL BE USED FOR THE PURPOSE OF FACTORY FOR MANUFACTURE. FURTHER , IT WAS PROVIDED THAT IT WO ULD NOT BE USED FOR ANY PURPOSE. ONE OF THE TERMS PROVIDED THAT NO CONSTRUCTION WORK SHALL BE COMMENCED UNLESS THE PLANS, ALLEVIATION AND SANCTIONS HAVE BEEN APPROVED BY THE LOCAL AUTHORITY OR PLANNING AUTHORITY, ETC. THE SAID LEASE DEED WAS EXECUTED ON 23.05.1990. THE ASSESSEE ADMITTEDLY, HAD CONSTRUCTED THE BUILDING THEREUPON . V IDE AGREEMENT DATED 15.09.2005, THE ASSESSEE AGREED TO SELL AND ASSIGN ALL THE RIGHT, TITLE AND INTEREST IN THE SAID PROPERTY ON AS IS WHERE IS BASIS AND TRANSFERRED ALL THEI R RIGHTS UNDER THE LEASE DEED DATED 23.05.1990 IN THE SAID PROPERTY FOR CONSIDERATION. THE AGREED PRICE BETWEEN THE PARTIES WAS RS.70 LAKHS, WHICH WAS TO BE PAID IN INSTALLMENTS. IT WAS ALSO AGREED THAT ON RECEIPT OF ENTIRE CONSIDERATION, POSSESSION OF T HE SAID PROPERTY WOULD BE GIVEN. VARIOUS OTHER TERMS WERE AGREED UPON BETWEEN THE PARTIES, WHICH ARE NOT RELEVANT FOR DECIDING THE ISSUE RAISED HEREIN AND HENCE, NOT BEING REFERRED TO. THE ASSESSEE SOUGHT PERMISSION FROM MIDC TO TRANSFER THE SAID PROPERT Y WHICH WAS RECEIVED AS LATE AS 08.02.2010. THE FINAL DEED OF ASSIGNMENT OF LEASE WAS EXECUTED ON 31.03.2010, UNDER WHICH THE BUILDING ALONG WITH LEASEHOLD RIGHTS IN THE SAID PROPERTY WERE TRANSFERRED BY THE ASSIGNOR TO THE ASSIGNEE I.E. BY THE ASSESSEE T O THE PURCHASER. IT WAS ACKNOWLEDGED THAT THE PURCHASER HAD ALREADY PAID THE AGGREGATE CONSIDERATION OF RS.70 LAKHS. THE ASSIGNMENT WAS IN RESPECT OF PERPETUAL RIGHTS OR THE TITLE. THE SAID DOCUMENT WAS A REGISTERED DOCUMENT, 12 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 UNDER WHICH STAMP DUTY VALU ATION WAS MADE BY THE STAMP VALUATION AUTHORITIES AND AS AGAINST SALE CONSIDERATION OF RS.70 LAKHS , T HE STAMP DUTY VALUATION WAS MADE ON RS.2,71,89,700/ - . THE ASSESSING OFFICER HAS BIFURCATED THE SAID FIGURE INTO THE VALUE FOR THE LEASEHOLD OF LAND AT RS. 1,71,50,000/ - AND THE VALUE OF BUSINESS STRUCTURE AT RS.1,00,39,700/ - . THE CASE OF ASSESSEE BEFORE US IS THAT SINCE THE PROPERTY IN QUESTION IS LEASEHOLD LAND AND BUILDING , THEN THE VALUE, IF ANY, DETERMINED UNDER SECTION 50C OF THE ACT IS NOT TO BE APPLI ED. THE FIRST PLEA RAISED IS THAT THE LEASEHOLD PROPERTY INCLUDES THE VALUE OF LAND AND VALUE OF BUILDING AND WHERE THE PROVISIONS OF SECTION 50 C OF THE ACT ARE NOT ATTRACTED, THEN FOR COMPUTING CAPITAL GAINS, THE VALUE AS SHOWN BY THE ASSESSEE AT RS.70 LAKHS BE ADOPTED. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS PLACED RELIANCE ON VARIOUS DECISIONS. ON THE OTHER H AND, CASE OF REVENUE IS THAT THE SALE OF LEASEHOLD LAND AND SALE OF BUILDING APPURTENANT THERETO ARE TWO DIFFERENT TRANSACTIONS, WHEREIN SALE OF LAND IS TO BE CONSIDERED AS INCOME FROM LONG TERM CAPITAL GAINS AND SECTION 50C OF THE ACT IS TO BE APPLIED. HOWEVER, IN RESPECT OF SALE OF BUILDING, WHERE THE ASSESSEE HAD CLAIMED DEPRECIATION ON THE SAID BUILDING TILL CLOSE OF LAST YEAR, THEN THE ASSET BEING DEPRECIABLE ASSET, PROVISIONS OF SECTION 50 OF THE ACT ARE TO BE APPLIED AND THE INCOME IS TO BE COMPUT ED AS INCOME FROM SHORT TERM CAPITAL GAINS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HERE HAS POINTED OUT THAT THE GAIN ARISING ON SUCH DEPRECIABLE ASSET IS DEEMED TO BE LONG TERM CAPITAL GAINS AND HENCE, TAXES APPLICABLE ON SUCH LONG TERM CAPITAL GAINS IS TO BE TAXED IN THE HANDS OF ASSESSEE. 17. THE FIRST ASPECT OF THE ISSUE RAISED IN THE PRESENT APPEAL IS WHETHER THE LAND WHICH HAS BEEN SOLD BY THE ASSESSEE IS LEASEHOLD LAND AND HENCE, THE 13 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 PROVISIONS OF SECTION 50C OF THE ACT ARE NOT TO BE APPLIED. THE ISSUE HAS BEEN CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. GREENFIELD HOTELS & ESTATES PVT. LTD. (SUPRA), WHEREIN IT HAS BEEN HELD THAT THE PROVISIONS OF SECTION 50C OF THE ACT WERE NOT APPLICABLE TO TRANSFER OF LAND AND BUIL DING BEING LEASEHOLD PROPERTY. THE SAID STAND WAS TAKEN BY THE HONBLE HIGH COURT SINCE THE TRIBUNAL HAD APPLIED THE RATIO LAID DOWN IN ATUL PURANIK VS. ITO IN ITA NO.3051/MUM/2010, ORDER DATED 13.05.2011 SINCE THE REVENUE HAD NOT PREFERRED ANY APPEAL AGA INST THE ORDER OF TRIBUNAL AND THE ISSUE ARISING IN THE CASE OF CIT VS. GREENFIELD HOTELS & ESTATES PVT. LTD. (SUPRA) BEING SIMILAR, WHEREIN THE TRIBUNAL HAD RELIED ON ITS EARLIER DECISION, THEN IT WAS HELD THAT WHERE THE REVENUE HAS ACCEPTED THE DECISION OF THE COURT / TRIBUNAL ON AN ISSUE OF LAW AND NOT CHALLENGED IT IN APPEAL, THEN SUBSEQUENT DECISION FOLLOWING EARLIER DECISION CANNOT BE CHALLENGED. 18. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, HAS PLACED RELIANCE ON TH E RATIO LAID DOWN BY THE MUMBAI BENCH OF TRIBUNAL IN SHAVO NORGREN (P) LTD. VS. DCIT (SUPRA), WHEREIN THE COMPANY HAD TAKEN A PLOT OF LAND FROM MIDC ON LEASE FOR 95 YEARS AND HAD LATER ENTERED INTO MOU FOR TRANSFER OF PART OF THE LAND WITH THE CONSENT OF M IDC. THE ISSUE WHICH WAS BEFORE THE MUMBAI BENCH OF TRIBUNAL WAS WHETHER THE ASSESSEE WAS THE OWNER OF PLOT OF LAND OR ONLY HAVING LEASEHOLD RIGHTS AND WHETHER THE PROVISIONS OF SECTION 50C OF THE ACT WERE ATTRACTED ON THIS TRANSFER. REFERENCE WAS MADE T O THE RATIO LAID DOWN IN ATUL (SUPRA) AND OTHER DECISIONS OF THE TRIBUNAL WHICH LAID DOWN THAT THE TRANSFER OF LEASEHOLD RIGHTS DOES NOT ATTRACT APPLICATION OF PROVISIONS OF SECTION 50C OF THE ACT. THE TRIBUNAL IN SHAVO NORGREN (P) LTD. VS. DCIT (SUPRA) DISTINGUISHED THE SAME BY HOLDING THAT THE ASSESSEE HAD PAID 14 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 PREMIUM FOR THE LEASEHOLD LAND SUBJECT TO FULFILLMENT OF CONDITIONS STATED THEREIN. HOWEVER, PERUSAL OF LEASE AGREEMENT WITH MIDC REFLECTS THAT SUBSTANTIAL RIGHTS WERE TRANSFERRED TO THE ASSESSE E INCLUDING THE RIGHTS TO CONSTRUCT BUILDINGS. THE ASSESSEE IN THE FACTS OF THE SAID CASE ALIENATED PART OF PLOT OF LAND AND ENTERED INTO A DEED OF ASSIGNMENT AND IN THIS REGARD, OBTAINED PERMISSION FROM THE ULC AND COMPETENT AUTHORITIES FOR THE SAID TRAN SFER. THE TRIBUNAL THUS, HELD THAT WHERE THE ASSESSEE TRANSFERRED THE RIGHTS IN THE PLOTS AS WELL AS RIGHTS IN THE BUILDING, THE TRANSFER OF PROPERTY IN QUESTION DO ATTRACT THE PROVISIONS OF SECTION 50C OF THE ACT AND SINCE BOTH THE LAND AND BUILDING WERE ASSIGNED BY THE SAID DEEDS, THE PROVISIONS OF SECTION 50C OF THE ACT WERE APPLICABLE. THE TRIBUNAL FURTHER VIDE PARA 20 OBSERVED THAT THE ASSESSING OFFICER WAS NOT CORRECT IN EXCLUDING THE VALUE OF BUILDING AND MAKING ADJUSTMENT IN BLOCK OF ASSETS. HOWE VER, THIS ISSUE WAS SET ASIDE TO THE FILE OF ASSESSING OFFICER. THE SAID DECISION WAS PASSED ON 14.12.2012. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS ALSO REFERRED TO LUCKNOW BENCH OF TRIBUNAL IN ITO VS. SHRI HARI OM GUPTA (SUPRA) AND THE DELHI BENCH OF TRIBUNAL IN ITO VS. SH. CHANDER SHEKHAR (SUPRA). HOWEVER, IN VIEW OF THE PROPOSITION LAID DOWN BY THE HONBLE BOMBAY HIGH COURT AS LATE AS 24.10.2016, WHEREIN IT HAS BEEN HELD THAT PROVISIONS OF SECTION 50C OF THE ACT WERE NOT APPLICABLE TO TRANSFER OF LAND AND BUILDING BEING A LEASEHOLD PROPERTY, THEN APPLYING THE SAME, WE HOLD THAT THE PROVISIONS OF SECTION 50C OF THE ACT ARE NOT APPLICABLE. 1 9 . THE REVENUE VIDE GROUND OF APPEAL NO.1 HAS RAISED THE SAID ISSUE AS TO WHETHE R THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE UNDER SECTION 50C OF THE ACT HOLDING THAT THE SAID SECTION WAS NOT APPLICABLE TO THE LEASEHOLD 15 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 PROPERTY. IN VIEW THEREOF, WE FIND NO MERIT IN THE GROUND OF APPEAL RAISED BY THE REVENUE AND THE SAME IS DISMISSED. 20 . THE SECOND ISSUE RAISED BY THE REVENUE IS AGAINST TREATMENT OF RENTAL INCOME FROM HOUSE PROPERTY IN THE HANDS OF ASSESSEE. 2 1 . THE ASSESSEE IN THIS REGARD HAS POINTED OUT THAT THE PROPERTY WHICH WAS GIVEN ON RENT WAS NOT RESIDENTIAL PRO PERTY ALTHOUGH IT WAS MISTAKENLY DESCRIBED AS RESIDENTIAL PROPERTY. THE ASSESSEE POINTED OUT THAT IN ACTUAL FACT, IT WA S A FACTORY SHED WHICH WAS LEASED OUT AND HENCE, THE INCOME HA D TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES . IN THIS REGA RD, HE HAS FILED THE EVIDENCE OF ELECTRICITY BILLS PAID WHICH STATED THAT CONNECTION WA S 15HP AND ALSO THE PCMC FOR PROPERTY TAX WHICH STATES THE USER AS COMMERCIAL IN MARATHI WHICH MEANS INDUSTRIAL. WE FIND MERIT IN THE CLAIM OF ASSESSEE THAT THE PROPERT Y IN QUESTION IS NOT A HOUSE PROPERTY IN VIEW OF EVIDENCES FILED AND ALSO IN VIEW OF THE OBSERVATIONS OF THE CIT(A). ACCORDINGLY, UPHOLDING THE ORDER OF CIT(A) IN THIS REGARD, WE FIND NO MERIT IN THE GROUND OF APPEAL NO.2 RAISED BY THE REVENUE. HENCE, AP PEAL OF REVENUE IS DISMISSED ON BOTH THE COUNTS. 2 2 . NOW, COMING TO THE APPEAL OF ASSESSEE, WHEREIN THE ASSESSEE IS AGGRIEVED BY THE ORDERS OF AUTHORITIES BELOW IN TAXING THE AMOUNT OF GAIN ARISING ON SALE OF BUILDINGS AS SHORT TERM CAPITAL GAINS. 2 3 . THE ASSESSEE HAS RAISED ADDITIONAL GROUNDS OF APPEAL IN THIS REGARD WHICH IS WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE THAT THE RATE OF TAX APPLICABLE TO LONG TERM CAPITAL GAINS INSTEAD OF SHORT TERM CAPITAL GAINS BE 16 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 APPLIED WHILE C OMPUTING THE CAPITAL GAINS TAX LIABILITY ON DEPRECIABLE ASSETS. IT IS AN ADMITTED FACT THAT THE BUILDING IS DEPRECIABLE ASSET AND WE FIND THAT THE ISSUE OF RATE OF CAPITAL GAINS TAX TO BE APPLIED IS STANDS COVERED BY M/S. PODDAR BROTHERS INVESTMENT PVT. L TD. VS. DCIT (SUPRA) AND M/S. SMITA CONDUCTORS LTD. VS. DCIT (SUPRA) . 24. HOWEVER, MAIN PLEA OF ASSESSEE IS THAT BUILDING IS ON THE LAND, WHICH IS LEASEHOLD AND HENCE, PROVISIONS OF SECTION 50C OF THE ACT ARE NOT ATTRACTED. IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. GREENFIELD HOTELS & ESTATES PVT. LTD. (SUPRA), WE FIND MERIT IN THE PLEA OF ASSESSEE. THE PROVISIONS OF SECTION 50C OF THE ACT ARE THUS, NOT ATTRACTED AND THE VALUE FOR COMPUTING CAPITAL GAINS ARISING ON SALE O F THE BUILDING UNDER SECTION 50 OF THE ACT IS TO BE THUS, RESTRICTED TO THE VALUE AS SHOWN BY THE ASSESSEE OR AS WORKED OUT ON PROPORTIONATE VALUE BY ADOPTING THE VALUE OF LAND AND BUILDING AT RS.70 LAKHS. 25. NOW, COMING TO THE ADDITIONAL GROUND OF APP EAL RAISED BY THE ASSESSEE. THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF MUMBAI BENCH OF TRIBUNAL IN M/S. SMITA CONDUCTORS LTD. VS. DCIT (SUPRA), WHEREIN THE TRIBUNAL HAS HELD AS UNDER: - 2.5.THE SAME VIEW HAS BEEN TAKEN BY THE MU MBAI BENCH OF TRIBUNAL IN CASE OF MANALI INVESTMENTS VS. ACIT REPORTED IN 139 TTJ 411 (MUM), IN WHICH IT HAS BEEN HELD THAT THE PRESCRIPTIONS OF SECTION 50 ARE TO BE EXTENDED ONLY TO THE STAGE OF COMPUTATION OF CAPITAL GAIN AND, THEREFORE, CAPITAL GAIN RES ULTING FROM TRANSFER OF DEPRECIABLE ASSET WHICH WAS HELD FOR MORE THAN THREE YEARS WOULD RETAIN THE CHARACTER OF LONG TERM CAPITAL GAIN FOR THE PURPOSE OF ALL OTHER PROVISIONS OF THE ACT. .. ARISING FROM TRANSFER OF LONG TERM CAPITAL ASSET. 2.6 WE, THEREFORE, HELD THAT, FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN, THE FLAT HAS TO BE TREATED AS SHORT TERM CAPITAL GAIN U/S 50 OF THE IT ACT, BUT FOR THE PURPOSE OF APPLICABILITY OF TAX RATE IT HAS TO BE TREATED AS LONG TERM CAPITAL GAIN IF HELD FOR MO RE THAN THREE YEARS. WE ACCORDINGLY DIRECT THE AO TO COMPUTE THE CAPITAL GAIN FROM THE SALE OF FLAT AND APPLY THE APPROPRIATE TAX RATE AFTER NECESSARY VERIFICATION IN THE LIGHT OF OBSERVATIONS MADE IN THIS ORDER. 17 ITA NO. 782 /PUN/20 1 5 ITA NO. 918 /PUN/20 1 5 26. ACCORDINGLY, WE HOLD THAT IN RESPECT OF DEPRECIABLE ASSET WHICH WAS HELD FOR MORE THAN THREE YEARS, THEN IT WOULD RETAIN THE CHARACTER OF LONG TERM CAPITAL GAINS FOR THE PURPOSE OF T A X O N COMPUTATION OF CAPITAL GAINS ON SUCH TRANSFER. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE CAPITAL GAINS FROM SALE OF BUILDING IN THE HANDS OF ASSESSEE AND APPLY APPROPRIATE TAX RATES AS APPLICABLE TO LONG TERM CAPITAL GAINS. 27. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED AND THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 9 T H DAY OF OCTOB ER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 9 T H OCTO BER , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) , PUNE - 6 ; 4. THE PR. CIT - 5 , PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE