Regarding C/fd and set off of loss

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Preeti (Querist)
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01 September 2008 An individual has the following income structure for A.y 2007-08.
PGBP - Rs.100,000/-
B/fd Business loss of A.Y 2006-07 - Rs.200,000/-
He doesnt file Return of income for A.Y 2007-08.

For A.Y 2008-09 he has PGBP of Rs.250000/- and he files Return before the due date.
Issue:-
1) will the loss of A.Y 2006-07 be allowed to be b/fd?
2) How much will be allowed to be set off in A.Y 2008-09 :- the whole loss OR Rs.100000/- (i.e loss after setting off the income of A.Y 2007-08)? (if possible pls provide justifications for the answers)

Thanks.

Preeti

Preeti (Querist)
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01 September 2008 Dear all,

Please resolve this query asap.

Thanks.

Jitender

Jitender (Expert)
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01 September 2008 1) yes ,it is allowed if roi of a.y 06-07 was filed wilthin time allowed u/s 139(1).
2 loss of rs 100000 will be set-off.

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Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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01 September 2008 THE RATIONAL BEHIND IS THIS THAT C/F WAS ASCERTAINED IN THE YEAR 2006-2007 , TO BE CARRIED FORWARD FOR SUBSEQUENT YEARS.......NOW UNLESS THE ORDER OF 2006-2007 IS MODIFIED THE C/F CAN NOT BE DENIED

Preeti

Preeti (Querist)
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03 September 2008 Thanks All,

I got the rationale for c/fd of loss. But what is the rationale for allowing loss of Rs.100000/- to be set off? What can stop the assessee from arguing that since the income of A.Y 2007-08 was as such not in the taxable limit there is no obligation for him to set off the b/fd loss of A.Y 2006-07? (IS setting of of b/fd loss mandatory or discretionary?); Also can he claim that he didnt have any income for A.Y 2007-08 and hence the whole loss of Rs.200000/- shud be allowed to be set off?

Regards.

Preeti

Preeti (Querist)
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11 September 2008 Can anybody please reply to this query?????