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)
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
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?
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