|Question And Answer
|Section 112A is mandatory or an option to choose section 112 or section 112A whichever beneficial
|Advocate Shashi Ashok Bekal
|Capital Gains, Long term capital loss - Longterm capital gains - Option
|June 20, 2021
Whether Long term capital loss on listed securities (STT paid on buy & sale both) can be computed by following the section 112(1) by taking benefit of indexation as given in second proviso to section 48.
Whether section 112A is mandatory to be followed or it is an option to choose either section 112 or section 112A whichever beneficial to assessee while computing long term capital loss.
Or if the computation results in a gain, assessee will have to re-compute the capital gains having regard to the provisions of section 112A of the Act.
Section 112A of the Income-tax Act, 1961 (Act) starts with a non-obstante clause i.e.,“Notwithstanding anything contained in section 112…”. Therefore, section 112A of the Act will prevail over section 112 of the Act.
The Hon’ble Supreme Court in the case of Raj Krushna Bose vs Binod Kanungo and Others 1954 AIR 202 held that a non obstante clause is introduced in an enactment with the object of indicating that one section of an Act takes away what another confers.
Therefore, section 112A of the Act will override section 112 of the Act and application of section 112A of the Act will be mandatory.