The Tax Publishers2020 TaxPub(DT) 5488 (Del-Trib)


Section 50(2)

Where the assessee company demolished the existing structure of building which was situated on the leasehold land, for constructing a new factory, and since there was no other asset in the block of assets, therefore, written down value of the said building claimed as short-term capital loss, was rightly allowed by Commissioner (Appeals).

Loss - Capital loss - Claim of short-term capital loss on depreciable asset on demolition of building without effecting transfer under section 50(2) -

Assessee purchased a leasehold property with land and building, which were capitalized separately, i.e., the land as long-term investments and the building as a depreciable asset. The building was the only asset in that depreciable block. Since they want to develop the property the said building was demolished and thus, the assessee claimed the written down value of the block of building as a short-term capital loss. AO held that there was no transfer of the said asset but only demolition of building, thus, disallowed the claim of the short-term capital loss. On appeal, the CIT(A) upheld the views of the assessee allowing the said short-term capital loss. Aggrieved, revenue went in higher appeal. Held: Commissioner (Appeals) while deciding the issue in favour of the assessee has given a finding that assessee had followed the right method of calculating the short-term capital loss on the building which was demolished during the year and since there was no other asset in the said block, assessee had claimed the WDV of the said asset as short-term capital loss as per the provision of section 50(2) of the Act. No fallacy in the findings of the Commissioner (Appeals) had been pointed out by Revenue nor Revenue had placed any contrary binding decision in its support. Therefore, there was no reason to interfere with the order of Commissioner (Appeals).

Relied:ITO v. Jaydeep Kumar Sharma 52 422 (Del-Trib) and Rajeev Agarwal v. ACIT (2014) 149 ITD 363 (Agra) : 2014 TaxPub(DT) 2460 (Agra-Trib).


FAVOUR : In assessee's favour.

A.Y. : 2012-13



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