Sale of factory land capital gains

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CA Sanjay Baheti (Querist)
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24 November 2012 Dear Experts,

A company was running a manufacturing industry on its own land. It is running in losses from last 6 years. Now it intends to sell a part of its land. Does such transaction attract capital gain tax or is it possible in any way that gains from such transaction be set-off against accumulated business losses?

CA.Amit Revankar

CA.Amit Revankar (Expert)
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25 November 2012 Capital gain cannot be set off against business losses. However u can consider converting that land into stock in trade and then showing it as business income, but this strategy will not take longer time and not free from litigation

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
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26 November 2012 Even if it is converted in to capital gain capital gain will be attracted.
if there is any unabsorbed depreciation then set off that against capital gain.

CA Jeen paul

CA Jeen paul (Expert)
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03 December 2012 under sec72& 73 says that loss under the head P& G of business or profession can carried forward and setoff only agaist P & gains of the suceseeding years.

but in your case since the co.is in loss atleast current year losses can be setoff from current years capital gains.

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