Capital gains- building redevelopment

Assessee proposed to avail benefit of an Exemption Notification (Condition that no CENVAT Credit will be availed). The department has objected on the ground that the assessee is not an eligible unit as per the Exemption Notification. Assessee is still of the view that it is an eligible unit, and hence, duty was paid under protest.

For this purpose, the assessee has neither availed the Credit on Capital Goods nor has he included the CENVAT portion in the value of Capital Goods, rather the CENVAT Credit is kept in a separate account.

There may be two cases:

Case 1: Where finally Exemption is allowed after litigation, this credit would not be available.

Case 2: Where finally Exemption is disallowed even after litigation, this credit would be available.

Question - 1: In case 1 above, whether it is possible to include the above CENVAT portion in the value of Capital Goods on receipt of the final decision and claim depreciation on the same?

Question – 2: In case 2 above, whether it would be possible to avail the benefit of CENVAT credit on receipt of the final decision?

Please suggest as per the provisions of Central Excise Law.

Replies (2)

@ Rohan

Having reagards to the decision made in Chiranjeev Lal Khanna v. ITO case , there is a transfer

Facts of that case

The owners entered into agreement with the developers to demolish the existing building and redevelop the said land into a new building on 50 percent sharing basis based on the terms and conditions set out in the agreement.

As per the agreement, the plot of land will continue to be owned by the owners and developers have no right and title over it.

 

 

Sale consideration shall arive by considering sec 50C

Thank U...:)smiley

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