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TMI Blog2018 (10) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... by the share broker on behalf of the appellant herein were not correct ?" 3. The assessee is a partnership firm dealing in purchase and sale of paper. For the assessment year under consideration (2004-05) relevant to the previous year ending 31.3.2004, the return of income was filed showing a loss of Rs. 40,486/-. The said return was initially accepted under Section 143(1) of the Income Tax Act, 1961 (hereinafter called the Act) on 27.6.2006. During scrutiny assessment, which was later framed by the Assessing Officer on 29.12.2006, the assessed income was determined at Rs. 1,36,22,800/- and while doing so, the Assessing Officer applied the provisions of Section 50 of the Act to compute the capital gains arising from the transfer of property owned by the assessee situated in Chennai. 4. According to the assessee, the entire asset along with land and building were shown in the balance sheet of the old firm, to which, the assessee had succeeded and the depreciation on the building had been claimed and deducted from the consolidated total. The purchase price of the land was stated to have not been shown distinctly under the head 'land', while the cost of the building was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee filed an appeal before Commissioner of Income Tax (Appeals)-IX [for short the CIT (A)]. The appeal was dismissed vide order dated 31.3.2008. Challenging the order passed by the CIT (A), the assessee filed an appeal before the Tribunal, which was dismissed by order dated 18.7.2008, which is impugned in this tax case appeal. 9. We have heard Mr.A.S.Sriraman, learned counsel appearing on behalf of the appellant and Mr.M.Swaminathan, learned Senior Standing Counsel for the Revenue. 10. After carefully going through the facts of the case and the stand taken by the assessee before the Assessing Officer, on the first issue as to whether the depreciation was claimed on the land, we find that the factual explanation given by the assessee was not properly construed. 11. The assessee, vide letter dated 21.12.2006, had specifically stated that no depreciation was claimed on the building after 31.3.1998, that the land with the abandoned building was handed to the developer for development, that the same was demolished, that the entire block of the abandoned building was claimed as a short term capital loss and that this short term capital loss had been debited to the profit and los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that consequently, what remained was only the land, which was not a depreciable asset, as no depreciation could be taken on the land and it was held that the provisions of Section 50 of the Act had no application to the case of the assessee therein. The said finding of the CIT (A) was confirmed by the Tribunal. Challenging the same, the Revenue preferred an appeal before the Division Bench of this Court. The substantial question of law, which was framed for consideration in the said case, was as to whether the Tribunal was right in holding that the capital gains arising on the sale of land and building, on which, depreciation had been claimed, would not be hit by the provisions of Section 50 of the Act. 16. We find that the substantial question of law, which was framed for consideration in the case of Union Co. (Motors) Ltd., is identical to question No.1 framed in this appeal. The said question was answered in favour of the assessee following the earlier decision in the case of ACIT Vs. Raka Food Products [reported in (2005) 277 ITR 261 (Mad.)]. The operative portions of the judgment in Union Co. (Motors) Ltd., read as follows : "5. This Court in Assistant Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividual assessee for the assessment year 1991-92 and she was carrying on weaving work on job basis in her three concerns. There were eight looms in M/s.Gitanjali Silk Mills and four each in the other concerns. It was the case of the assessee that the looms of M/s.Gitanjali Silk Mills were operated from gala No.210 and the other looms of the sister concerns were operating from gala No.211. In the background of these facts, the Court held that the case was distinct, that no claim for depreciation was in issue and that the question of thrusting it upon the assessee did not, therefore, arise. 20. The decision in Smt. Meena Pamnani is wholly inapplicable to the facts of the present case and hence, it does not render any assistance to the case of the Revenue. 21. Therefore, we find that substantial question of law No.1 framed for consideration is fully covered by the decision in the case of Union Co. (Motors) Ltd. Accordingly, substantial question of law No.1 is answered in favour of the assessee and against the Revenue. 22. The second substantial question of law pertains to loss of sale of shares. The Assessing Officer found that the assessee had not filed proper details. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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