Forfeiture of convertible warrant results in Capital Loss for Income Tax

Shriram Retail Holdings Pvt. Ltd. Vs DCIT (ITAT Chennai) Forfeiture of convertible warrant would result into extinguishment of the right of the assessee to obtain a share. A share in a company is nothing but share in the ownership of the company. While the right of the assessee to share in the ownership of the company stand extinguished on account of forfeiture, the company, with all its assets, continues to exist. The forfeiture only results in one less shareholder. Therefore, the loss thus suffered by the assessee would be a capital loss. Respectfully following these decisions, we would hold...