S.54EC is applicable to depreciable assets also

•M/s. Jai Hind Rubber Products Vs ACIT, ITA No.2296/Mum/2011, Date of pronouncement: 03.08.2012, ITAT- Mumbai

•Assessee is entitled to exemption under section 54E in respect of capital gains arising on transfer of a capital asset on which depreciation has been allowed

•factory building was used for business purposes on which depreciation has been claimed. The gain on sale of this is treated as Short Term Capital gain.

•The legal fiction created by the statute is to deem the capital gain as short-term capital gain and not to deem the asset as short term capital asset. Therefore, it cannot be said that section 50 converts a long-term capital asset into a short term capital asset.”

•CIT Vs ACE Builders Pvt. Ltd. (2006) 281 ITR 210 (Bom).