Case Law Details
DCIT Vs Shri Hrishikesh D. Pai (ITAT Mumbai)
Conclusion: Assessee was entitled for deduction u/s. 54F on the capital gains arising on the sale of depreciable assets being commercial flats computed in the manner laid down in Section 50 read with Section 48, 49 and 45 and section 50 was a deemed provision, therefore, its applicability could not be extended to deduction section 54F.
Held: Assessee intended to claim deduction u/s 54F with respect to capital gains arising from the sale of commercial flats being unit numbers 24-26 situated at Pearl Center , Dadar which were used by assessee for running his clinic and on which depreciation u/s 32 was also claimed by assessee by treating the same as long term capital gains entitled for deduction u/s 54F on reinvestment made in new residential flat at Beau Monde, while Revenue on the other hand treated the same as short term capital gains in the teeth of provisions of Section 50 by holding that the gains on sale of commercial property to be short term capital gains on sale of short term capital asset depriving assessee benefit of deduction u/s 54F on reinvestment in new residential flat as the said section stipulated that only long term capital gains were entitled for deduction u/s 54F for reinvestment made in new residential properties. It was held section 50 creates a deeming fiction by modifying provisions of Section 48 and 49 for the purposes of computation of capital gains chargeable to tax under Section 45 with respect of the depreciable assets forming part of block of assets and there was nothing in Section 50 which could suggest that deeming fiction was to be extended beyond what was stated in provisions of Section 50 and it could not be extended to deduction allowable to the assessee u/s 54F which was an independent Section operating in altogether different field.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal, filed by Revenue, being ITA No. 2766/Mum/2017, is directed against appellate order dated 05.12.2016 passed by learned Commissioner of Income Tax (Appeals)-5, Mumbai (hereinafter called “the CIT(A)”), for assessment year 2012-13, the appellate proceedings had arisen before learned CIT(A) from assessment order dated 30.03.2015 passed by learned Assessing Officer (hereinafter called “the AO”) u/s 143(3) of the Income-tax Act, 1961 (hereinafter called “the Act”) for AY 2012-13.
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