1. Pvt Ltd.Co. Closed business in the A.Y. 11-12. No Business Transaction.
2. Co. Not dissolved.
3. Claimed depreciation up to 31-03-2010- Long Term Asset.
4. Depreciation Not claimed in the year -31-03-2011
5. Sales Long Term Asset in A.Y. 2012-13
6. Whether Taxable u/s.112 of Income Tax Act, 1961
Pl. Guide.
Thanks,
AGRAWAL SITARAM C.
Tax Treatment of Asset Sale in 2012-13: Depreciation Affects Capital Gains Classification Under IT Act Sections 112, 50, and 54 EC. A private limited company ceased business operations in the assessment year 2011-12 but was not dissolved. The company claimed depreciation on a long-term asset until March 31, 2010, but not in the following year. The asset was sold in the assessment year 2012-13, raising questions about its tax treatment under section 112 of the Income Tax Act, 1961. Responses clarified that if depreciation is claimed, the asset is considered a short-term capital gain, taxable under section 50, irrespective of the lack of depreciation claimed in 2011. However, adjustments against long-term capital gains are possible, and section 54 EC may be applicable. (AI Summary)
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