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TMI Blog2014 (2) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the assessee derived on sale of factory building and borewell is to be treated as short term capital gain in view of special provisions contained in section 50 of the Act – thus, consideration received should be bifurcated in respect of each of the assets on reasonable basis - the Assessing Officer was not justified in treating the entire capital gains as short term capital gains nor the CIT(A) was justified in treating the entire capital gains as long term capital gains as claimed by the assessee – the order set aside and the matter remitted back to the AO for recomputation of the capital gains – Decided in favour of Revenue. - ITA No. 1831/Ahd/2012 - - - Dated:- 6-2-2014 - Shri Mukul Kr. Shrawat And Shri N. S. Saini,JJ. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y land alongwith factory building and borewell. As it was not a case of sale of any undertaking, therefore, he submitted that the Ld. CIT(A) was not justified in directing the Assessing Officer to treat the capital asset as long term capital gain. He submitted that as the transfer involved transfer of depreciable asset on which depreciation was claimed by the assessee regularly, therefore, the profit thereon was rightly treated by Assessing Officer as short term capital gain. He placed reliance on the decision of Hon'ble ITAT, Calcutta Bench in the case of ACIT Vs. Sekhar Gupta (2001) 79 ITD 192 (Cal.), decision of ITAT, Delhi Bench in the case of Raj Woolen Industries Vs. ACIT (2012) 20 taxmann.com 267 (Delhi), decision of the Hon'ble Madr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown cost of the land building at Rs 11,86,890/- and as it was not possible to bifurcate the cost of land and building, we have claimed indexation for the entire amount in our return of income and calculated long term capital gain of Rs 55,815/-. We have relied upon the Hon'ble Madras High Court judgement in the case of ACIT vs Raka Food Products (205) 277 ITR 261 [Mad]. Without prejudice, we would like to submit that the cost of factory land was Rs 3,20,000/- purchased in the F.Y. 1997 on which no depreciation was claimed and accordingly lawful indexation shall be allowed to workout the final capital gain in the case and that indexed cost of land shall be deducted while arriving at the short term capital gain u/s 50 on the sale value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the instant case the letter of understanding between the appellant and the buyer shows that the intention was to sell the entire bakery business with land, building, plant and machinery and the closing stock as a going concern for a total and lump sum consideration of Rs. 25,55,555. Though the immovables had to be registered and for that purpose the guideline valuation had been adopted by the Registrar, it is not a case of transfer of series of assets individually, but a transler of the entire business undertaking as a whole. In such an event, it is not possible to determine at what consideration individual assets movable or immovable were transferred. The same is true of depreciable and non-depreciable assets also." 12. The aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, dismissed." 10. Thus, the facts of the instant case are found to be distinguishable from the facts which were before the Hon'ble Madras High Court in the above case. In that case, it was found that the assessee had sold his bakery including the land, building and machinery and therefore, it was found that the assessee sold an undertaking whereas in the instant case, only factory land, factory building alongwith borewell was sold and it is not a case where an entire business undertaking as such was sold by the assessee. The above facts are also established from the submissions made by the assessee before the Assessing Officer as extracted hereinabove. Therefore, we find that the decision of the Hon'ble Madras High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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