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TMI Blog2023 (11) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... he audited financial statement forming part of the paper book. Ld. Counsel referred to Schedule G of fixed assets forming part of the audited financial statement wherein land is one of the items reported in the Schedule. It was pointed out that in the gross block and net block, the amount which appeared against land are gross amounts at which the lands were acquired by the assessee. In the same schedule, in the column for depreciation, the amounts are NIL thus, no depreciation whatsoever has been charged by the assessee on land owned by it. Ld. CIT(A) has placed reliance on certain judicial precedents which are in reference to sec. 50 dealt with the depreciable assets and treatment of capital gain thereon. Thus, considering the submissions made by the Ld. Counsel, the factual matrix and the material on record, we set aside the order of Ld. CIT(A) since he has altogether digressed from the issue raised by the assessee before him and had taken a stand unwarranted on the facts of the case. Considering the above stated facts duly corroborated by documentary evidence, we find the computation of long term capital loss on sale of land to be proper and allow the claim of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,29,92,240/- against which Rs. 53,05,404/- was received during the F.Y. 2003-04. Balance amount was received in the subsequent years and Deed of Sale was executed during the F.Y.2006 07 relevant to the Assessment Year 2007-08. In the Audited Accounts for the year ended on 31.03.2004 the Auditor credited the net amount of sale proceeds of the entire land and other Fixed Assets aggregating to Rs. 5,30,53,601/- to the Profit Loss Account under the head, Profit on Fixed Assets sold and/or discarded [Net] . On the basis of the Audited Accounts for the year ended 31.03.2004 the Appellant had computed Long-Term Capital Loss of Rs. 56,26,708/- on sale of the said land for the Assessment Year 2004-05 after deducting Index Cost of Acquisition from sales consideration. But on the basis of remarks passed by the Auditor in his Notes on Accounts, the A.O. had disallowed the Appellant's claim of Long-Term Capital Loss in the Assessment Year 2004-05 and he had considered the same in the Assessment Year 2007-08 treating the part of the sales proceeds received as Advance against sale of the land. In the Appeal the action of the A.O. was confirmed. As there was no monetary loss and the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 as Rs. 1,06,96,050. But assessee valuation report filed could not be reconciled with the sale agreement. Hence the fair market value claimed by the assessee is ignored. Value of land deducted in the fixed asset of balance sheet in AY 2007-08 of Rs. 3,51,51,080 is considered. The remarks passed by the A.O. are not acceptable in the eye of law. When the Fair Market Value of Land can be ascertained on the basis of Approved Valuer's Report, the same has to be ascertained and adopted by the A.O. Long-Term Capital Loss was computed at Rs. 65,21,210/- on the basis of Approved Valuer's Report and the same was submitted before the A.O. as well as before the Ld. CIT(A)' as per annexure attached herewith. Marked A . On perusal of the Assessment Order it is not understood how the Net Loss had been worked out by the A.O. at Rs. 55,32,535/- and how the Long Term Capital Gain had been worked out to Rs. 1,39,74,161 by adding Rs. 6,07,611/- with Rs. 1,98,48,920/- apparently which should had been Rs. 2,04,56,531/- only and Net Capital Gain should had been at Rs. 9,49,835/- on the basis of his own calculation. All these prove that the Assessment was completed hurriedly without ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term capital loss on sale of land by taking into consideration the correct set of facts corroborated by documentary evidence placed on record. The computation so furnished in this respect is reproduced as under: 9. We fail to understand on the conclusion drawn by Ld. CIT(A) of treating land as depreciable assets and subjecting it to capital gain u/s. 50 of the Acton the premise that land was traded by the assessee as a business asset as reflected in the Balance Sheet of the assessee. The issue contested by the assessee was that Ld. AO was not correct in computing the long term capital gain on sale of land as against the long term capital loss reported by the assessee by taking indexation benefit on the cost of acquisition. Ld. CIT(A) has altogether digressed from the issue and taken a stand unwarranted on the facts of the case. 9.1. To address the issue raised and dealt with by the ld. CIT(A), we first refer to Sec. 50 of the Act which contemplates that capital gain in respect of depreciable asset referred to in section 32(1)(ii) of the Act is to be computed on the basis of block of assets for which depreciation has been allowed u/s. 32(1)(ii) and (iia) of the Act. Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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