Hi Friends..
Can anybody tell me the exact meaning of "LOOM HOURS" with exact link on the wikipedia, if any or any other suitable link where I can read it thoroughly???? Or else, please explain whatever you know about it!!!!
Best Regards
NEHA
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Loom hours
Replies (11)
Hi Neha
Loom is a textile machine for weaving yarn or thread into a textile.
Loom Hours means Right to use that machine for a particular time. For eg: If a person (X) installed a loom in his factory and his factory time is 09 am to 05 pm. X made a Contract with Y to use the loom after 5 pm to 05 am. That is called loom hour. Here X is transferring Right to use the loom for a certain time period to Y for some consideration.
It will be covered under capital gain tax. Here cost of acquisition will be Nil.
Amount of purcahse price will be cost of acquisition here.
It's not nill
Sanat is right.
further you can refer the below case also:
Commissioner of Income-tax
v.
Maheshwari Devi Jute Mills Ltd.
K. SUBBA RAO, J.C. SHAH AND S.M. SIKRI, JJ.
CIVIL APPEAL NOS. 66 AND 67 OF 1964
law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/%5B1965%5D057ITR0036(SC).htm
but is it allowed to use loom during night hours i.e., after 5 pm to 5 am as specified by sanat kumar?
yes. it is allowed.
Cost of acquisition is nil if it is self generared and it is purchase price if acquired.
awesome replies so helpful
As per section 55(2) of income tax 1961
Loom hours is covered under self acquired intangible assets so it's cost of acquisition will be nil
How can loom hours be a self generated asset
Loom is the acquired Asset. If we sell the Loom it has cost of acquisition. But loom hour is treated as self generated asset , when right to use only is transferred for a price, then there will be sale price but no cost of acquisition. (It is very Clear from the above example given by sanath sir)
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