It return: business expenses -> proprietors capital loss

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This query is : Resolved

Kapil Khanna (Querist)

03 September 2012 Can proprietor show Direct/Indirect Expenses of Business as Capital Loss in IT returns (Individual)?

The goal is to write of capital loss against capital gain (which is not possible for business expenses).

Thanks,
Kapil

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

04 September 2012

How can we show a business related expense in Capital gains of the assessee?An expense in business is not a capital related expense to be adjusted against Capital gains.

Kapil Khanna

Kapil Khanna (Querist)

05 September 2012 Well, let me explain ...
Proprietor loans personal capital to Company
Company makes losses, including business expenses.
Proprietor writes off loaned capital to business (losses+Expenses) as BAD DEBT = CAPITAL LOSS.

Why this cannot be done?

Thanks in advance,
Kapil

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

05 September 2012 Because of the simple reason that loans advanced do NOT fall under the category of capital assets and hence cannot be treated as loss from capital asset.

If you still believe it does, could you please tell whether capital gains is taxable when the company does well and redeems the loans?

Bro, i'd suggest that you go through the capital gains provisions well because you are very confused

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