27 April 2009
An assessee (a partnership firm) owned only one shop premises, which was sold during the year for Rs. 4 lacs. The shop was used for purpose of business. However, the assessee has not claimed any depreciation on the said shop in the earlier years. The said shop was purchased in F. Y. 2001 – 02 for a cost of Rs. 52,000/-. The market value of the said shop on date of sale as assessed by stamp valuation officer is Rs. 6.24 lacs.
a) Does the sale of such shop premises attract capital gains? STCG or LTCG?
b) Is section 50C attracted?
c) In case the assessee purchases another shop premises during the year, will the sale of the original shop still be liable to capital gains?
27 April 2009
I agree with Chetan as the assets is not a depreciable assets and is held for more then 3 year before disposal, the gain on this will be LTCG and section 50 C and 54E apply.
28 April 2009
The computation of the capital gains will be done as per block of assets method since shop is a depreciable asset even if the assessee has not claimed any depreciation it will be assumed that he has claimed the depreciation since it is mandatory as per Sec.32 and Sec.50C is applicable.
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