CAPITAL LOSS SET OFF

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A user is seeking advice after their client was denied the set-off of capital losses (under sections 111A & 112A) incurred in AY 2020-21 against income in AY 2021-22. Both income tax returns were filed by the due date, and a rectification request under section 154 has been unsuccessful. The user has confirmed losses were correctly claimed and processed in AY 2020-21 and that all necessary schedules were included in the subsequent return.

GROUP SELF

GROUP SELF (Querist)
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25 November 2022 Hi all,

My client is not allowed to claim set-off, in A.Y. 2021-22, of capital losses(u/s 111A & 112A) incurred in A.Y. 2020-21. ITR of both the Assessment Years are filed on or before due date u/s 139(1). No reason for denial of set-off is available. Rectification request u/s 154 for mistake apparent from record in the intimation received u/s 143(1) has not worked out.

Kindly share your experience with the same matter.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 November 2022 Need to check your claims of loss. It seems department has not accepted your loss claim in AY 2020-21.

GROUP SELF

GROUP SELF (Querist)
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25 November 2022 Respected Sir,
I have verified in ITR-Form of A.Y. 2020-21, Losses have been correctly claimed and also processed by Department.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 November 2022 Section 74 OF I T Act:

Loss under the head "Capital Gains" can be carried forward and set off as follows:

Loss from short term capital asset can be set-off both against Long Term Capital Gain and Short-Term Capital Gain;
Loss from long term capital asset can be set off only against income from long term capital asset.
&
Loss under the head 'Capital Gains' can be carried forward for 8 years.

Whether you had claimed loss in ITR of AY 2021-22, by filing all the schedules like bough forward losses, & finally adjusting the same under Schedule CG etc..???

GROUP SELF

GROUP SELF (Querist)
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26 November 2022 Respected Sir,

I have attached all the required schedules and supporting calculations in ITR of both the Assessment years.
I am not able to figure out any reason for dis-allowance of set-off.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 November 2022 It needs to be checked thoroughly by an expert, so can't tell specific reason for denial.

GROUP SELF

GROUP SELF (Querist)
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28 November 2022 Thank you very much for your timely response.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 November 2022 You are welcome ..

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