The High Court held that the depreciable asset forming a part of block of assets within the meaning section 2(11) of the Act would not cease to be a part of the block of assets, that the description of the asset by the assessee in the balance-sheet as an investment asset was meaningless, that so long as the assessee continued business, the building forming part of the block of assets would retain its character as such, no matter that one or two of the assets were not used for the business purposes in one or two years, and that the assessment of the profits on sale of the flat as short-term capital gains was to be confirmed. On appeal Supreme Court affirmed the view of the High Court. (AY.1998-99)
Sakthi Metal Depot v. CIT (2021) 436 ITR 1 / 204 DTR 440 / 322 CTR 9 / 282 Taxman 384 (SC) Editorial : Decision in CIT v. Sakthi Metal Depot (2011) 333 ITR 492 (Ker.) (HC) affirmed. Refer, Sakthi Metal Depot v. ITO (2005) 3 SOT 368 (Cochin) (Trib.)
S. 50 : Capital gains-Depreciable assets-Block of assets-Depreciation allowed for 21 years-Not used for business for two years-Asset shown as investment in balance sheet-Gains assessable as short term capital gains. [S. 2(11), 2(29A), 2(29B) 45, 50A]