I.P. Bansal, Judicial Member. - These are cross appeals directed against the order of CIT(A) dated 2-2-2001 for assessment year 1997-98.

Grounds of appeal in revenue’s appeal read as under :—

"On the facts and in the circumstances of the case ld. CIT(A) is not right in holding that part of the cold storage building is liable to long term capital gains. Same piece of land cannot be divided. Capital Gains on Land and building is to be taken together as per the provisions of section 50 of the Income-tax Act. Land becomes an integral part of the building and looses its character of a land when a building is constructed on it."

Grounds of appeal in assessee’s appeal read as under :—

"1.The ld. CIT (Appeals) has erred in law in holding that land appurtenant to a building forms a part of a block of assets, within the meaning of section 2(11) of the Income-tax Act, 1961 for purposes of section 50 of the Act, for computation of capital gains.

2.The ld. CIT (Appeals) has erred in not fully allowing the contention that land and building are separate assets, for the purposes of computation of capital gains.

3.The ld. CIT (Appeals) has erred in not holding that the short term capital loss and the long term capital loss, as computed in the Income Tax Return, should be accepted."

2. Common issue involves in these appeals. The assessee has sold land, building and equipments vide sale deed dated 28-8-1996 for a consolidated amount of Rs. 30,50,000 in which the price assigned to building and equipment is stated at Rs. 50,000. Copy of sale deed is placed at pages 6 to 14 of the paper book. According to the version of the assessee, it was operating cold storage till financial year 1975-76 and the total area of land is 9783 sq. yds. According to assessee, after financial year 1975-76 the said premises were not used and they were lying vacant without any activity being carried thereupon. At the time of sale also the building was not usable as its foundation were not reliable and it was having only malwa (scrap) value. After financial year 1975-76 no depreciation was being claimed and the schedule of fixed assets forming part of balance sheet did not change thereafter. The said schedule of assets as filed by the assesee in its paper book from year to year read as under :—

M/s Kapursco Cold Storage Pvt. Ltd.: Panipat

Schedule ‘A’ Fixed Assets forming part of the balance sheet as at 31-3-1996

3. The assessee computed the capital gain on such sale as under :—

Kapursco Cold Storage Pvt. Ltd.

Assessment year 1997-98

Annexure - Computation of Capital Gains

(A) Short Term Capital Gain

Sales consideration of all depreciable assets other than land, listed in the enclosed

Balance Sheet :—