01 September 2011
The company has incurred expense during last year [ i.e. first year of incorporation and was not having any business income]. Now in next year it has taxable income.
Will it be able to set off the losses[ incurred during pre commencement] of last year against income of this year. Any reference of law?...Pls advice....
01 September 2011
yes. Business loss can be carry forward and set off as per section 71
(a) It shall be set off against the profits and gains, if any, of that business or any other business carried on by him and assessable for that assessment year; and
(b) If the loss cannot be wholly so set off, the amount of loss not so set off shall, in case the business so re-established, reconstructed or revived continues to be carried on by the assessee, be carried forward to the following assessment year and so on for seven assessment years immediately succeeding.
CAclubindia
