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Section 50 of the Income-tax Act, 1961 - Capital gains - Computation in case of depreciable assets Section 50 deals only with transfer of depreciable asset; once land forms part of assets of undertaking and transfer is of entire undertaking as a whole, section 50 would not apply [In favour of assessee] Section 50 deals only with the transfer of depreciable asset; once the land forms part of the assets of undertaking and transfer is of entire undertaking as a whole, it is not possible to bifurcate the sale consideration. Therefore, section 50 would not apply in such case. CASE REFERRED TO Asst. CIT v. Raka Food Products [2005] 277 ITR 261 (Mad.) (paras 2, 3). K. Subramanian for the Appellant. JUDGMENT F.M. Ibrahim Kalifulla ,J.- T he Revenue has come forward with the above appeal raising the following substantial questions of law: "1 . Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in confirming the order of the Commissioner of Income-tax (Appeals) holding that only the capital gains on the building had to be computed as short-term capital gains and the balance value of the land should be treated as long-term capital gains, even though the land and building being one composite asset and the assessee having claimed depreciation on the said asset, as per the provisions of section 50, the entire profit was assessable as short-term capital gains ? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was entitled to exemption under section 54EC of the Income-tax Act ?" 2. The issue is directly covered by the decision of a Division Bench of this court in Asst. CIT v. Raka Food Products[2005] 277 ITR 261 (Mad), wherein the Division Bench had taken a view that where once land forms part of the assets of the undertaking and the transfer was of the entire undertaking as a whole, it was not possible to…

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