To
qualify as a short term capital asset, the capital asset should be held
by the assessee for 12 or 36 months, but the moment the said time limit
is crossed or is exceeded and the assessee continues to be the
holder/owner of the said asset, the same is to be treated as a long term
capital asset [BHARTI GUPTA
RAMOLA v. CIT [2012] 20 taxmann.com 762 (Delhi)]
•
The term 'month' has not been defined in the Act and, therefore,
'month' would have to be understood in the sense of 'calendar month' as
defined in section 3(35) of the General Clauses Act, 1897.
•
Period of 12 calendar months would begin on the day when the assessee
became the holder of the asset and end one day before in the relevant
calendar month, next year. Thus, if an assessee acquires an asset on 2nd
January in a preceding year, the
period of 12 months would be complete on 1st January, next year and not
on 2nd January. This position will apply to all cases, except when an
asset is transferred/purchased on 1st January. In such cases, the period
of one year or 12 months would expire and would be complete on 31st
December in the same year.
•
The clause refers to the holding period. It will not be appropriate to
exclude or include any day of the holding for computing the said period.
The date on which the asset is acquired is not to be excluded because
the holding starts from the said date. Neither is the date of
sale/transfer to be excluded.
The period of 12/36 months accordingly will have to be computed. Thus,
if an asset is held for 12 months/36 months and is sold the very next
day after the period of 12/36 months is over, the asset would be treated
as a long term capital asset.
• There is nothing in the said section to show and hold that the time period would not include fraction of a day
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