DCIT v. Ackruti Safeguard Systems (P) Ltd. [I.T.A. No. 6173/Del/2016, dt. 17-12-2020] : 2020 TaxPub(DT) 5488 (Del-Trib)

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

Facts:

Assessee purchased a leasehold property with land and building which were capitalized separately 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. Assessing officer held that there was no transfer of the said asset but only demolition thus disallowed the claim of the short-term capital loss. On appeal the Commissioner (Appeals) upheld the views of the assessee allowing the said short-term capital loss. Aggrieved revenue went in higher appeal --

Held against the revenue (in favour of the assessee) that they were entitled to the short-term loss.