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)

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)

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)

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)

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)

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)

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)

28 November 2022 Thank you very much for your timely response.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 November 2022 You are welcome ..

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