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TMI Blog2020 (12) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. Disallowance of short-term capital gain/loss - AO noted that it had demolished the existing building and since the building was demolished and it was the only asset in the block of asset , the written down value as appearing in the fixed scheduled for Income Tax working was claimed as Short Term Capital loss u/s 50(2) - HELD THAT:- CIT(A) while deciding the issue in favour of the assessee has given a finding that assessee had followed the right method of calculating the short term capital loss on the building which was demolished during the year and since there was no other asset in the said block, assessee had claimed the WDV of the said asset as short term capital loss as per the provision of Section 50(2) - Before us, no fallacy in the findings of the CIT(A) has been pointed out by Revenue nor Revenue has placed any contrary binding decision in its support - Appeal of the Revenue is dismissed. - ITA No.6173/Del/2016 - - - Dated:- 17-12-2020 - Sh. H. S. Sidhu, Judicial Member And, Sh. Anil Chaturvedi, Accountant Member For the Assessee : None For the Revenue : Sh. Prakash Dubey, Sr. DR ORDER PER ANIL CHATURVEDI, AM: This appeal filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y time before or during the hearing of this appeal. 5. The case file reveals that in the past and on the date of hearing none appeared on behalf of the assessee nor any adjournment application was filed on its behalf. In such a situation we proceed to dispose of the appeal ex parte qua the assessee after considering the material on record and after hearing the DR. 6. First ground is with respect to the disallowance u/s 40(a)(ia) of the Act. 7. During the course of assessment proceedings, AO noticed that assessee had claimed interest of ₹ 1,48,94,552/- of which ₹ 29,78,910/- was transferred on Capital Work in progress and the balance amount debited in the P L account was ₹ 1,19,15,642/-. The assessee was asked to furnish the details and justify of interest debited to P L A/c. The submissions made by the assessee of the claim of expenses was not found acceptable to AO. AO also noted that on the interest payment, TDS was not deposited till the due date of filing of return u/s 139(4) of the Act. AO was of the view that assessee was liable to deduct TDS and deposit the TDS with the appropriate authorities before the due date of filing the return of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. During the course of assessment proceedings, AO noticed that assessee has claimed short-term capital loss of ₹ 28,95,598/-. Assessee was asked to furnish the details of short-term capital loss which the assessee furnished. On the basis of the details furnished by the assessee, AO noted that it had demolished the existing building and since the building was demolished and it was the only asset in the block of asset , the written down value as appearing in the fixed scheduled for Income Tax working was claimed as Short Term Capital loss u/s 50(2) of the Act. The AO was of the view that as per the provision of Section 50(2) of the Act, short term capital loss can arise only in case of transfer of any asset of any block of asset but in the present case since there has not been any transfer of asset, but it was the case where the part of an asset has been demolished with the intention to create an altogether a new structure, the provisions of Section 50(2) are not applicable. He therefore held that the short- term capital loss is not allowable to assessee. He also noted that the short-term capital loss was not properly substantiated with supporting evidence. He accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO disallowed the claim of short term capital loss. It is seen that appellant had purchased said building alongwith the land and cost of the building and land was apportioned proportionately. The appellant has shown the cost of building under the head Fixed Assets whereas the cost of land was shown under the head Non-current Investment. In its return of income the appellant has claimed depreciation on the said building and the cost of the land was claimed 1/10th every year as it was a leasehold land. During the year the building was demolished for constructing a new factory building on the said land, therefore, the WDV of the earlier building shown in the books of account has been claimed as short term capital loss. Since there was no other asset in the said block, therefore, the WDV has to be claimed as short term capital loss. The AO has stated that there is no transfer, therefore, short term capital loss cannot be claimed. In this regard provisions of section 50 needs to be referred wherein special provision for computing of capital gains in case of depreciable assets have been defined which states as under: - 50. Notwithstanding anything contained in clause (42A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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