12 September 2010
Mr. A has gross receipts from his retail business Rs.2500000 during the previous year 2009-10.
His loss from the same business in the preceding previous year (i.e. 2008-09) was Rs.200000 and unabsorbed depreciation for that previous year was Rs.300000. He got audited his accounts u/s 44AB in that previous year.
now in the current Assessment Year (2010-11), will carried forwarded unabsorbed depreciation and loss be allowed to be set off against presumptive tax u/s 44AF??
12 September 2010
Section 32(2) says unabsorbed depreciation is as good as current year depreciation. Therefore, unabsorbed depreciation cannot be set off against current year income determined under section 44AF. Section 72 does not say so. In view of that, unabsorbed business loss can be set off against current year income determined under section 44AF.
13 September 2010
Where the income is computed on presumptive basis u/s 44AD, 44AE or 44AF, the provisions of section 28 to 43C do not apply. Unabsorbed Depericiation is allowed to be set off u/s 32(2) and not u/s 70 or 72. Hence unabsorbed depericiation cannot be set off against the presumptive income computed u/s 44AD, 44AE or 44AF- DCIT v. Sunil M. Kankariya[2008] 298 ITR (AT) 205(ITAT-Pune).
Business loss other than unabsorbed depericiation can be set off against income u/s 44AF
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