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investments treatment

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arti mehta

Article

70 Points Joined December 2009

What is the treatment in following case?

There is a holding of Preference Shares in City Realcom Ltd. worth approx.Rs.11,00,000/- in 2008. There was a Receipt of regular dividend.The redemption year is 2013. However the company is under Dispute in court of law and it known that the principal amount is irrecoverable.how is this treated as per Income Tax?Can the entire amount be written off in a particular financial year.what is the treatment?The assessee is an Individual..

Replies (2)

CA Vishwas Aradhya

Consultant

60 Points Joined December 2010

Arti, Holding of Preference Shares in any entity is a capital transaction and treated as Investments in the Share Holder's books. Writing off of capital portion due to non recoverability of investment is a capital transaction and cannot have any implication on taxability. PS: above cannot be treated on par with a. Deduction for bad debts. b. Capital Loss Regards, CA Vishwas Aradhya | +91 95913 18000 itsvishwas @ gmail.com Bangalore