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Set off of short term capital loss against long term capital gain

SHAILESH SANGANI (PROPRIETOR) (61 Points)

01 October 2016

Can we set off short term capital loss on account of sale of depreciable asset ( Asset was held for more than 3 years) against long term capital gain arising on account of sell of tenancy rights

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4 Replies

CA Karan Sathe (CA ) (564 Points)
Replied 01 October 2016

yes definitely . i forgot the case law...you can try its ' Rajiv shukla vs.....income tax

CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 01 October 2016

Yes..short term capital loss can be set off from long term capital gain.

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CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 01 October 2016

The delhi High court in its ruling in CIT V.Rajiv Shukla(2011) 334 ITR 138 held that deeming fiction created by section 50 that the capital gain arising on transfer of a depricable asset shall be treated as capital gain arising on transfer of a short term capital asset is only for the purpose of sections 48 and 49 and not for the purpose of any other section.
Hence, you can set off deemed short term capital loss arising on depricable asset against long term capital gains.