9911796707
TMI Blog2017 (9) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... avor of assessee. Disallowance u/s 14A read with rule 8D - Held that:- The said disallowance is unwarranted on the facts of the instant case, as the same was so made by AO without recording a proper satisfaction with regards to the books of accounts of the assessee and in deleting the said disallowance of ₹ 1,21, 986/-. My aforesaid view is fortified by the judgment of the Hon'ble Supreme Court in the case of Godrej Boyce & Manufactoring Co. Ltd. CIT [2017 (5) TMI 403 - SUPREME COURT OF INDIA] . - I.T.A.No.5984/Del/2016 - - - Dated:- 31-8-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER For The Assessee : Sh. Salil Aggarwal, Adv. For The Department : S h. T. Vasanthan, Sr. DR ORDER This appeal by the assessee is against the order of the Ld. CIT(A) dated 7.10.2016, which order has been passed after the order of the ITAT in the first round of proceedings dated 13.2.2016. In the first round of proceedings, the Ld. CIT(A) has not admitted the appeal of the assesse company on account of delay in filing the appeal, however pursuant to the directions of the ITAT in the first round of proceedings, the Ld. CIT(A) has condoned the said delay and has decided the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred any expenses in relation to the exempt income. 3. That the Ld. CIT(A) has erred sustaining the levy of interest u/s. 234B and 234C of the Act. 2. The brief facts of the case are that the assessee company has sold during the year under consideration a running restaurant at commercial space B-247, Supermart-I, DLF Phase-IV, Gurgaon on as is where is basis including all interior work, civil work, electrical work, kitchen equipment, utensils, Furniture Fixtures attached to the said premises for a sale consideration of ₹ 1,15,00,000/- (comprising of ₹ 70,00,000/- for building and ₹ 30,00,000/- for Furniture and ₹ 15,00,000/- for Plant Machinery) for which necessary documents confirming the said sale of assets was filed before the lower authorities. Apart from the above sale of ₹ 1,15,00,000/-, the assessee has sold Plant Machinery for ₹ 3,00,000/- and Vehicles for ₹ 80,000/- during the year under consideration. 2.1 In the return of income filed by the assessee company, for the AY 2007-08 the assessee had shown a short term capital gain of ₹ 7,87,982/- which was assessed and enhanced by the AO as short term capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and further, two assets falling within two different class of assets can never constitute a single block of assets even though they may be eligible for depreciation at the same rate and thus, the lower authorities have worked out short term capital gain by only considering building as the capital asset sold, as the furniture and plant machinery fall under different classes of assets. In view thereof, the assessee claim that that building, furniture fixture and plant machinery claimed to have transferred by it form the single block of asset was rejected by lower authorities. 4. On the contrary, the learned Sr. DR, Sh. T. Vasanthan, relied on the orders of lower authorities and reiterated the findings of the lower authorities. 5. I have heard both the parties and perused the records available with me and also gone through the facts of the case and the paper books filed by the assessee. Before adverting to main issue, I would like to refer the provisions of section 50 and section 2(11) of the Indian Income Tax Act, 1961. The relevant provisions are reproduced below: Section 50 Special provision for computation of capital gains in case of depreciable ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assets are covered. In the instant case, on going through the order of learned CIT (A), it is observed that he has failed to appreciate the fact that section 2(11) of the Indian Income Tax Act, 1961 specifies as only two class of assets i.e. tangible and intangible assets and within these two classes of assets, assets having same rate of depreciation are prescribed and they fall within the same block. Whereas, the concept of an asset falling within the same block is driven by the same rate of depreciation once it falls in the same class of assets and namely there are only two classes of assetstangible assets and intangible assets. 5.2 In view of the above, I find that Ld. CIT (A) has completely misunderstood and misconceived the aforesaid provisions of the Act and has wrongly interpreted that an asset can be in the same block only on the basis of class of assets, as well as rate of depreciation and not on rate of depreciation alone. It is the finding of the Ld. CIT (A) that for an assessee to be in the same block of asset, it is mandatory that they should fall within same class of asset should also be eligible in the same rate. Ld. CIT (A) in his order has held that, Two a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
