Capital Gains Query

hey aditya,

Nice case and a very hot discussion. I also wish to add my views to this particular case...

Firstly,there is clear provision and many case laws which reflects that depn is allowed to assesse whether claimed or not, so if u are having only leasing business and have just taken the income from the property in IHP then on the date of same sale consideration will be deducted from WDV of the block.

But if u r not taking leasing income in PGBP then,

in case of sale, Provisions of capital gains will aply(i.e STCG or LTCG) and from sales consideration value of asset(Actual cost less depn already claimed) will be deducted and taxed accordingly..........

As no business on date of sale so no section 50 or block of asset or deemed WDV.

I think point would now be clear...

Ur frnd

Archit

Dear All,

The company is into other businesses also. However the rent income being received by the company is being treated as income from house property by the Income Tax Department in view of the Supreme Court judgement of Shambu Investment. So the properties which were let out on that no depreciation has been allowed. However the company is also running business on one of the premises on which depreciation is being allowed by the department.

One of the properties which was first being used for business on which deprecaition had been claimed and allowed has been let out subsequently and no depreciation was further claimed on the said property by the company itself. Now the company wants to sale this property. So what will be the treatment for the purpose of computing capital gains?

hey aditya, got ur point...

In ur case as once depn is taken in block and depn earlier already claimed but due to AO decision later no depn claimed...then also asset would be deemed to be part of block and accordingly block rules will be applied i.e.STCG on transfer under section 50 for depreciable assets...I hav already confirmed ur case with Girish Ahuja sir and he was also of same view...sales consideration will be deducted from block and if sales value is more than WDV then only cap gain will arise...........so normal depreciable asset prov...........

I think now querry wud b solved...........

Archit

Thanks a lot Archit.

Yes the combined reading of the relevant provisions for sale of depreciable asset it supports your view and now it has been confirmed by your view. And so as the WDV of the block of asset not being claimed depreciaion currently does not turn zero no capital gains accrue.