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Issues involved: Appeal filed by revenue for assessment year 2006-07 regarding exemption u/s.54EC from short term capital gain on depreciable assets and interpretation of Section 50 for computation of capital gains.
Issue (a): The main issue is whether the ITAT was justified in allowing exemption u/s.54EC from short term capital gain on depreciable assets, even though Section 54EC provides exemption only for long term capital gain. The appellant argued that the exemption under Section 54EC is available only for long term capital gains, not short term capital gains. Issue (b): Another issue is whether the ITAT was correct in not considering Section 50, which deals with the computation of capital gains for depreciable assets. Section 50 states that capital gains from the transfer of depreciable assets shall be treated as short term capital gains, thereby excluding the availability of exemption u/s.54EC, which is specifically for long term capital gains. The Tribunal relied on a previous decision of the Court in the case of CIT V/s. M/s. ACE Builders Pvt. Ltd. to address the issues raised in the appeal. The Court found no reason to entertain the questions of law proposed by the appellant and dismissed the appeal without any costs.
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