Mr Capital Asset--How old are you?

Hi Mr Madhu and everyone,

I am more inclined towards the majority opinion here. Theword "month" hasn't been defined in the Income Tax Act. The GeneralClauses Act defines "month" to mean a month reckoned according tothe British Calendar. This merely means that we can't refer to theHindu Samvat Calendar (I think 14th Jan is the first day of the yearaccording to the Hindu Calendar), or some other Calendar, fordetermining the period of holding for calculating capital gains taxon the sale of assets. We shall have to abide by the BritishCalendar.Now, when does a month begin and when does it come to an end? Like Isaid the reference to the British Calendar month in the GCA doesn'tmean the clock will start ticking for an asset on the first day ofthe month, even if the assessee bought the capital asset in themiddle of the month; nor does the assessee have to wait till thearrival of the 14th month (April—May) (38th in case of assets otherthan shares) in order to have the CG treated as LTCG. A month I feelfor the purposes of determining whether a CG is LT or ST comprisesof a period of 30 days. In other words, 12 months means 365 days.Had the intention of the legislature been any different, thenwouldn't it have inserted a Rule on the lines of Rule 119A of theIncome Tax Rules 1962? Rule 119A says for the purposes of levy on,as well as payment of interest to, the assessee a fraction of amonth shall be reckoned as the full month. So if you're required tofile your return latest by 31st July, but wake up only on the 1stSeptember, you'd be supposed to deposit two months' interest u/s234A.In the absence of any such mandate in respect of determining the ageof capital assets, I think a period of 12 months will be reckoned inthe same way as we reckon the age of a human being. A baby born on15th April 2007 will turn 12 months old on 14th April (Yes 14th andnot 15th!) 2008. So shall the shares or any other capital asset forthat matter.Madhuji, I am curious to know the ruling you're saying you know ofthat laid down that a fraction of a month had to be rounded off toone month for determining the age of a capital asset. It thereindeed is such a ruling, it'd be applicable to all sorts of capitalassets and not to shares alone.Thanks,CA Sanjeev Bedi--- In ICAI_CIRC_MEERUT_CA@yahoogroups.com, madhu tapuriah wrote:>>> For the purpose computing period of holding in case of shares 12months means 12 alendar months and not 365 days.There has been aruling on this issue.I will let you know in due course.>> Regards> CA Madhu Soodan Tapuriah> --- On Tue, 20/1/09, RAJEEV AGARWAL wrote:> From: RAJEEV AGARWAL > Subject: {amresh's-CA's} period for Short term capital gain> To: ICAI_CIRC_MEERUT_CA@yahoogroups.com> Date: Tuesday, 20 January, 2009, 7:52 PM>>>>>>>>>>>> Dear Group members,>>>> My query is regarding time period on short-term capital gain.>>>> As per section 111-A,read with section 2(42A) a short term capital>> gain will be for a period less than 12 months, where securitiesare>> listed. Hence if a person purchased any share on 15th April 2007and>> sold it on 17th April 2008, whether it will amount to long-term>> capital gain or short-term, as the transaction has not concededfull>> 12 calendar completed months.>>>> Kindly enlighten whether 12 months means 365 days or 12 calendar>> months.>>>> Thanks in advance.>>>> CA Rajeev Agarwal,>> Agra>>