Loss on de-listed shares and ITR filing

This query is : Resolved

Saji Ninan (Querist)
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17 January 2022 Dear Sir,
Good Morning.
I did go through the reply / response by you with reference to the loss incurred on delisted shares LANCO Infra in which I have also invested in the years 2015-16 and 2018-19. I understand that I could incorporate the full amount invested by deducting only one rupee from the same.

I did invest/purchase LANCO for forty thousand rupees in FY 2015-16, thirty thousand rupees in FY 2018-19. The last traded date (with price) of LANCO shares in BSE is 12-September-2018 (Rs.0.42) and later shares are delisted/suspended.
So if I am incorporating the loss now for the assessment year 2020-21 (FY 2019-20), whether it is applicable as LTCG or STCG?

The one rupee present value to be considered as on Delisted date?
OR
Any other (applicable) dates?

I had a consultation last year (2020) with an auditor (in our area) who informed me that I could not book the loss in delisted or suspended shares and so I did not incorporate those invested amounts in ITR so far – for your information please.
Waiting for your valuable comments.
Thanks
Saji Ninan

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 January 2022 Once the shares get delisted, it becomes almost impossible to sell them unless the Company offers any exit route so effectively the investment becomes irrecoverable and is actual loss for the taxpayer but we cannot claim that loss as the shares have neither been extinguished nor transferred by you. In case the company has gone into liquidation or the company has been referred to NCLT under IBC and the NCLT has authorised the company to extinguish the shares, you can claim the loss. Whether the shares have been extinguished or not you can verify it from your demat statement.

If the same have been extinguished as well, you can apply the indexation on your original cost and claim the whole indexed cost as short term or long term depending on the holding period. Such loss can be carried forward for eight years if the same cannot be adjusted during the current year.

Saji Ninan

Saji Ninan (Querist)
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06 February 2022 Dear Seetharaman Sir,
Thank you very much for your valuable/immediate response .

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