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TMI Blog2012 (7) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order of ld. CIT (A)- VIII, Ahmedabad, order dated 30.01.2012 for assessment year 2005-06 and the main ground of appeal is as under:- 1. The Ld. CIT(A) has erred in law and on facts in directing the A.O. to treat gain of Rs. 21,65,616/- on sale of land, as long term capital gain without appreciating the fact that the permanent structure had been built on a land and plant and machinery had been erected thereon, the plot and the structure built thereon become inseparable. 2. The brief facts of the case are that the assessee has shown capital gain of Rs. 5,79,174/- on account of sale of land for sale consideration of Rs. 25,25,000/-. The valuation certificate of the land reveals that land includes main factory building and plant M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry Building and Plant Machinery separately in his books of account and calculated depreciation on Factory Building and Plant machinery only. No depreciation has been claimed on Factory Land being the land as a non depreciable asset which is evident from the schedule of Fixed Assets in Balance Sheet filed with the Return of Income. It may be noted that no Depreciation is allowable in respect of land as held by the Hon ble Supreme Court in the case of CIT v. Alps Theatre 65 ITR 377. Hence, Section 50 shall be not applicable in case of computing capital gain on sale of Land. After going through the details of the submission and case laws cited by the appellant and the finding of the AO, it becomes evident that appellant has not claimed dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C, which was allowed only for in case of Long Term Capital Gain, where capital assets held by the A.O. as Short Term Capital Gain. Finally, Hon ble Delhi High Court held as under:- We felt the need to refer to the legal position because of the arguments addressed before us on behalf of the Revenue that the cost attributed to the building when it was purchased was only Rs. 68,00,000/- divided as Rs. 49,32,000/- for S-7, Green Park, New Delhi and Rs. 18,68,000/- for S-8, Green Park, New Delhi, whereas the assessee had incurred expenditure on additions to the building in the amount of Rs. 1,58,16,423/- up to 31.03.2003 and reckoned from this date, the assessee did not hold the property for more than 3 years and, therefore, the sale of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above discussion, we answer both the substantial questions of law in the affirmative and in favour of the assessee. The appeal filed by the Revenue is accordingly dismissed with no order as to costs. 6. We have considered rival submissions of both the sides and gone through the case law referred by the A.R. of the assessee. It is found that Section 50 does not apply in case of land as no depreciation is allowable on the land when specific consideration for land has been provided in agreement for sale. The appellant has not claimed any depreciation on land. Therefore, we confirm the order of the ld. CIT (A). 6. In the result, the revenue s appeal is dismissed. Order pronounced in Open Court on the date mentioned hereinabove at captio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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