Brought Forward and unabsorbed depreciation

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Sandeep

Senior Manager Accounts and Finance

52 Points Joined May 2010

Dear Members

Greeting for the day.

The fact of the Case :- There is one loss making company which filed incometax return timely but didn't mention the carry forward losses and unabsorbed depreciation details in ITR ever . Now company wants to take the benefit of Losses and Dep . Whether it may be possible or not. Please give valuable advice supporting by the evidence.

As per our opinion Unabsorbed depreciation can be used even return may be not filed and there is no place in ITR for showing that details and punjab and haryana hotels caselaw supported this opinion, consequently we can take the benefit of unabsorbed depreciation.

As per our opinion on losses, Company filed the return timely so section 139(3) and section 80 complied so we can also take benefit of losses even if we may not shown the same in ITR.

Replies (2)

karan challani

article

82 Points Joined September 2010

The carry forward of loss has to be specified in the ITR. Anyway u have not done so when u claim the losses in the future year and any demand comes from the department u can reply under section 154.

There is no problem in setting off the loss.

CA Sandeep Kumar

Audit Assistant

804 Points Joined May 2009

Dear SAndeep,

You yourself have answered to the question. Please note that the decision in CIT vs. Haryana Hotels Ltd (276 ITR 521) case will be useful in your case too. The following points were decided in the case.

1) Since section 80 whcih specifies return to be filed as per section 139 (1) for the purpose of carry forward and set off of losses, the same section does not cover losses under house property and unabsorbed depreciation whcih is covered u/s 32 (2). Therefore as regards unabsorbed depreciation is concerned go ahead and set off as per the provisions- also, please consider Jaipuria China Clay Mines case (59 ITR 555) for procedure in carry forward and set off of unabsorbed depreciation.

2) Where the loss return is filed but the acceptance of the loss is not notified, such loss does not get lost for income tax purposes (held in same case Haryana Hotels)

Conclusion: Since in your case return is filed within time please go ahead and set off the losses.

Caution: Since Haryana Hotels case is a HC judgement, it may not be binding on the tax authorities if you are in a different state, different from state upon which Punjab and Haryans HC does not have jurisdiction.

Hope i have contributed what is known to me. Please revert.