Is it right in law in applying the section 50C and section 50 (depreciable assets) while computing capital gains on sale of depreciable assets?
Assessee is a partnership firm. It has sold the office building used earlier for business purpose during the previous year. The asset was sold for a consideration of Rs. 49, 43,525/-. The written down value of the said building after claiming depreciation for past years is Rs. 49,43,525/- and hence assessee declared the capital gains as NILL.
During the course of assessment proceedings the assessing office noticed that the value of the property as per the stamp duty valuation was Rs. 76, 49,000/-. According to him the full value consideration for transfer of the building is the value adopted for stamp value as per section 50C and after deducting the written down, value the balance amount is taxable as capital gains from transfer of building.