Whether STCG is chargeable or LTCG is chargeable?

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darshit (Querist)
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13 February 2009 Mr.X purchased a shop for Rs.1000000 on 20/10/2005.This shop was used for business but Mr.X never claimed depreciation on it and never included above shop in block of assets.He showed above shop as investment in balance sheet.He sold this shop after 3 years for Rs.1500000.The shop is a depreciable asset but depreciation has never been claimed.

Now my question is that whether capital gain tax will be chargeable as STCG or LTCG?What should be the tax treatment?

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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13 February 2009 Looking at the circumstances of the case, if the shop was used for business purpose, depreciation even if not claimed, it is assumed that the depreciation has been claimed.
So, STCG is chargeable u/s 50 and taxable as per slab rates.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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15 February 2009 it is taxable as LTCG. the question of deemed depriciation does not arise as you never treated the assest as part of the block of the assets.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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16 February 2009 There is no concept such as deemed depreciation.

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