SKF India Limited Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that assessee is not entitled for concession rate of tax of 20% provided under section 112(1) of the Income Tax Act on the short term capital gain computed under section 50 of the Income Tax Act.
Facts- The assessee has offered capital gain at Rs. 2,62,63,582/-as short term capital gains computed as per section 50 of the Act. Assessee paid the tax on such capital gain at the rate of 20% as prescribed u/s 112 of the Act plus applicable surcharge. In response to the show cause notice by the AO as to why rate of 30% should not be applied which is applicable on short term capital gain, the assessee submitted that its claim was based on decision of ITAT Mumbai, Bench in the case of Ace Builders Pvt. Ltd vs. ACIT (76 ITD 389). However, the Ld. AO rejected the assessee’s contention. CIT(A) confirmed the order of AO.
Conclusion- In Ace Builders Pvt. Ltd. it is held that if the capital gain is computed as provided under section 50, then, the capital gain tax will be charged as if such capital gain has arisen out of short term capital asset.
