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TMI Blog2021 (5) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). 2. The first issue in this appeal of assessee is against the order of CIT(A) in restricting the disallowance of expenses relatable to exempt income by invoking the provision of section 14A of the Act read with Rule 8D(2) of the Income Tax rule, 1962 (hereinafter referred to as 'Rules') to the extent of exempt income only. At the time of hearing the learned counsel for the assessee has not pressed this issue, hence, the same is dismissed as not pressed. 3. The second issue in this appeal of assessee is against the order of CIT(A) upholding the action of the Assessing Officer on account of depreciation by adopting the stamp value as per the provision of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has put his contention through words not through documentary evidences. The provision of sec 50C is analyzed hereunder: - The provisions of the Section 50C are applicable in the case of transfer of land and building including depreciable capital asset. The provision of section 5OC contains a special provision for determining full value of consideration and as per provisions of section 5OC when the consideration received or accruing as a result of the transfer by an appellant of capital asset being land or building or both, is less than the value adopted or assessed by an authority of the State Government for the payment of stamp duty in res pert of such transfer, the value so adopted or assessed shall. for the purpose of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has failed to discharge his owns by submitting necessary material before the L.D. AO. Therefore, it is held that no interference is called for in the decision of assessing officer as the appellant has failed to discharge the onus required under Section 50C of the Act and the Assessing Officer was justified in disallowance and added back to the appellant's income of Rs. 2,07,226/- Therefore, addition u/s 50C of the Act is confirmed. The appeal of the assessee on this ground is dismissed." 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the AO and CIT(A) has taken the value as per the provision of Section 50C of the Act and disallowed the differential depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expression "moneys payable" in relation to the sale of a building, machinery, plant or furniture would be the price for which it is sold and not the fair market value of the asset. Therefore, on a plain reading of the above provisions, it is clear that the written down value of all the assets falling within that block of assets at the beginning of the previous year has to be adjusted by the amount at which the asset is actually sold and not by the fair market value of the asset that is sold. 8. As rightly observed by the Income-tax Appellate Tribunal, the Legislature in section 43(6)(c)( i)(B) has used a different connotation in respect of sale of assets and sale of scrap. As per that section on sale of an asset, the written down val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t'. Since Section 50C is a deeming provision of the Act, it has to be construed strictly and its application can only made in the cases where the income under the head capital gain is assessed or assessable in accordance with the provisions of Section 48 of the Act. On the contrary however, we find that in the present case no income arising from sale of fixed assets of packet tea factory was assessed under the head 'Capital Gains'. We note that in terms of Section 32, 43(6)(c) read with Section 41(4) of the Act, the consideration received on transfer of depreciable assets was reduced from the opening WDV of the respective block of assets. After such reduction, none of the blocks ceased to exist and therefore only with reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous year. As per the Explanation (4) to Section 43(6), the term 'monies payable' had the same meaning as contained in Explanation below Section 41(4), according to which the said term meant "the price for which it is sold". We note that in the present case the assessee's transaction involving sale of factory building being a depreciable asset, was governed by the specific provisions of Section 43(6) read with Section 41(4) of the Act and not by the provisions of Sections 45, 48 and 50C. We therefore find merit in the ld. AR's submission that the provisions of Section 43(6)(c) read with Section 41(4) of the Act did not permit the AO to substitute the actual price at which the factory building was sold with the notional market ..... X X X X Extracts X X X X X X X X Extracts X X X X
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