LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Loom hours

Neha (Article) (118 Points)

05 August 2011

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

Reply
Follow
Share

11 Replies

Sanat kumar (Chartered Accountant) (265 Points)
Replied 05 August 2011

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.

10 Like

Shah Tarun (Student) (800 Points)
Replied 05 August 2011

/experts/meaning-of-loom-hours-447210.asp

1 Like

bn sneha (Student-IPCC) (44 Points)
Replied 24 April 2012

Amount of purcahse price will be cost of acquisition here.

It's not nill

Anil Verma (Auditor) (190 Points)
Replied 03 May 2012

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

Ruchit Khimawat (Student) (47 Points)
Replied 23 November 2012

but is it allowed to use loom during night hours i.e., after 5 pm to 5 am as specified by sanat kumar?

Anil Verma (Auditor) (190 Points)
Replied 03 January 2013

yes. it is allowed.

shambhavi (student) (22 Points)
Replied 17 August 2013

Cost of acquisition is nil if it is self generared and it is purchase price if acquired.

kannan (jobless) (263 Points)
Replied 01 October 2015

awesome replies so helpful

Kishan Kashyap (Student) (79 Points)
Replied 04 December 2018

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

Shiji Das Das (2 Points)
Replied 02 September 2019

How can loom hours be a self generated asset

Santhini shanmugam (2 Points)
Replied 18 December 2022

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)