Opinion Of Eminent Legal Luminaries On Controversial Issues

Can Asset Sold of One Unit Be Adjusted Against Block Of Assets Of Another Unit?

QUERY: If an assessee is owner of different proprietary concerns, can he get the block of assets under same group clubbed for all of his proprietary units or has to work out gain u/s 50 for the sale of assets of one of his unit?
ANSWER: S. 32 of the Income-tax Act, 1961, provides for a deduction or allowance being made in respect of depreciation of building, machinery, plant or furniture owned by the assessee and used for purpose of his business or profession, [Golcha Properties Pvt. Ltd. vs. CIT [209 ITR 80 (Raj)].

As per section 13(2) of General Clauses Act, 1897, singular includes plural and therefore a business would include businesses. Similarly, unit would include units. Hence a proprietor carrying on business through several units would be entitled to claim benefit of s. 50 of the Act on the sale of assets of one unit against the block of assets consisting of assets of several units.

Posted in Income-tax

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