Sec 50 of the income tax act

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Mukesh Bahtt (Querist)
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04 August 2011 Can loss on sale of depreciable asset be claimed as business loss and not as short term loss (sec.50)? The ground for raising the query is that sec.50(1) and 50(2) talk of excess and not short fall. Excess results in to gain which may by virtue of deeming provisions be treated as short term gain. But loss results on account of short fall as against excess and short fall is not mentioned in the Section and deeming provisions can not convert "excess" to "short fall".

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 August 2011 STCL can not be treated as business loss as
Sub-section (2) of section 50 talks about income received or accruing as a result of transfer. Income includes negative income or loss also.

In sub-section (1) the word "excess" could have been replaced by income also. But SS 1
is specifically for Capital Gain situation only.

Now I come to sub-section (2) of Section 50-

Had sub section (2) meant only for the purpose of capital gains in spite of the phrase "income received" the phrase " excess received" could have been appeared. But the intention is different here.

It clearly indicates that the word income has been
substituted in the ss2 as excess can not be a negative excess or deficit but income can be a negative income or loss also.

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