Case Law Details
DCIT Vs Claris Lifesciences Limited (ITAT Ahmedabad)
Deemed short-term capital gain on sale of depreciable assets can be set off against long-term capital loss
The case of DCIT vs. Claris Lifesciences Limited, heard at the ITAT Ahmedabad, delves into the allowance of setting off long-term capital loss against short-term capital gain from the sale of depreciable assets. The Revenue contests the decision made by the Learned Commissioner of Income Tax (Appeals)-12, Ahmedabad, concerning the Assessment Year 2018-19.
The crux of the matter revolves around whether the long-term capital loss incurred from the sale of shares can be set off against the short-term capital gain arising from the sale of depreciable assets, particularly plant and machinery, by Claris Lifesciences Limited. The Revenue argues against such allowance, citing provisions under section 50 of the Income Tax Act, 1961.
However, the appellate authority, after considering various legal precedents, including judgments from different High Courts and the Supreme Court, supports Claris Lifesciences’ position. It underscores that while section 50 deems capital gain on depreciable assets as short-term, it doesn’t restrict the set off of such gains against long-term capital losses.
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