13 February 2009
Mr.X purchased a shop for Rs.1000000 on 20/10/2005.This shop was used for business but Mr.X never claimed depreciation on it and never included above shop in block of assets.He showed above shop as investment in balance sheet.He sold this shop after 3 years for Rs.1500000.The shop is a depreciable asset but depreciation has never been claimed.
Now my question is that whether capital gain tax will be chargeable as STCG or LTCG?What should be the tax treatment?
13 February 2009
Looking at the circumstances of the case, if the shop was used for business purpose, depreciation even if not claimed, it is assumed that the depreciation has been claimed. So, STCG is chargeable u/s 50 and taxable as per slab rates.
15 February 2009
it is taxable as LTCG. the question of deemed depriciation does not arise as you never treated the assest as part of the block of the assets.
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