C.A Tarun Shah (practice) (271 Points)
31 December 2008We hv taken land at Ahmedabad from GIDC on lease in 1974 & construct factory shed on it .We hv sold the same in the year 2005-2006 .As per sales agmt.we hv sold land for Rs.5.00 Lacs & bldg.for rs.40.00 Lacs
On Factory shed we hv taken dep.up to 31.03.1999 .As per Income tax computation we hv shown land as Long term cap.gain & Bldg.we hv computed gain as per sec.50
ITO hs passed order by considering Land & Bldg.as per sec.50
Kindly advise whether ITO is right
Pavan Jain S
(Chartered Accountant)
(1575 Points)
Replied 31 December 2008
If the agreement clearly specifies separate consideration for land and building, the assessment has to be made accordingly since land is non depreciable asset.
In my view, the action of the ITO is not tenable in law
CAclubindia
