TaxTMI 
TaxTMI 
2026 (9) TMI 1034
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....the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing set-off of brought forward long-term capital loss against capital gains assessed as short-term capital gains under section 50 of the Income-tax Act, 1961, despite the clear provisions of section 74 which permit set-off of long-term capital loss only against long-term capital gains? 2. Whether the deeming fiction created under section 50 of the Income-tax Act, 1961, treating capital gains arising from transfer of depreciable assets as short-term capital gains, is applicable only for the purpose of computation or is required to be given full effect for the purposes of set-off and carry forward of losses under section 74 of the Act? 3. Whether ....
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....ts on which depreciation had been claimed. 4. The said property was initially acquired in the month of June 1994 and was thereafter transferred in August 2016. Accordingly, the said property was held for more than three years and was considered a long-term capital asset. 5. The said property was sold for a total consideration of Rs. 1,91,20,000, and after reducing the expenses on transfer and the opening WDV, the resultant capital gain of Rs. 1,88,23,967 was computed as per the provisions of Section 50(1) of the Act. The said capital gain was set off against the brought forward long-term capital losses, and the net taxable capital gain was computed at NIL. However, the AO denied the set-off of brought forward long-term capital losses ....
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....ssue involved in the present appeal is squarely covered by the decisions of the Hon'ble Jurisdictional Bombay High Court in the following cases: 1. CIT v. Hathway Investments Pvt. Ltd., ITA No. 405 of 2012 (Bom.) [Please refer Page Nos. 121 and 122 of the Paper Book] The Hon'ble Bombay High Court followed its own judgment in the case of Ace Builders Private Limited and dismissed the appeal of the Revenue, holding that the deemed short-term capital gain arising from the transfer of depreciable long-term capital assets held for more than three years can be set off against brought forward long-term capital losses. 2. Manali Investments v. ACIT (2013) 219 Taxmann 113 (Bom.) [Please refer Page Nos. 119 and 120 ....
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....evenue is against the Ld. CIT(A) allowing to set off of short term capital gains arising from sale of depreciable assets u/s 50 against the brought forward long term capital loss. Here again, we are not certain as to how this ground has been raised by the Department. The CIT(A) in para 4.1 has concluded as under: "The long term capital losses brought forward from earlier years are not eligible for set off against the short-term capital gain of the current year in view of the provisions of section 74," 15. Thus, the Ld.CIT(A) has held against the assessee and we do not see how the department can be aggrieved on this issue. However, we have pointed out that applying the ratio of the jurisdictional high court the carry forwar....