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carry forward losses

santhosh (Student) (1174 Points)

22 January 2010

hai friends... it is very urgent please replay immediately..

A state Goverment undertaking company stops business in A/y 2004-05 the comapany didn't filied any stoppage of business letter to any authority, filed IT returns upto A/y 2004-05 duely, no returns filed after that A/y.... Now another state Government Undertaking firm is takeover that old one in the A/y 2010-11.... My question is when the new firm takeover old one:-

1) Whether unabsorbed depreciation and business loss can claim by the new one, even if the company fails file return for the A/y 2005-06 onwards..

2) The said company is transfer the asset at a nominal value of Rs 1/- whether it will attract any Gift Tax or any Capital gain....

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13 Replies

Pradeep Sharma (student) (114 Points)
Replied 23 January 2010

no,the unabsorbed deprecation & business loss can not be carry forward by new company bcoz in income tax act, it has been cleary said that u can only forward the loss if u have provied the details of the loss in the revelant A.Y.

Otherwise not can not take the benefit of losses

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santhosh (Student) (1174 Points)
Replied 23 January 2010

thank you friend for your response...... but the company have full evidence with them for their losses also filed returns within duedate in all A/y's.... the only defalut is that they had not filed the return after A/y 2004-05...

santhosh (Student) (1174 Points)
Replied 23 January 2010

Mr sandeep, Please Read Sec 72A...........................

shashi (PCC ) (65 Points)
Replied 23 January 2010

Unabsorbed deprecation & business loss can not be carry forward by new company bcoz that Company didnt filed the Returns.

To Carry forward Losses they must filed the Returns in time then only it is possible

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CA. VIKAS GUPTA (PROPRIETOR) (305 Points)
Replied 23 January 2010

Hi,

i think, loss and depreciation can not be held in admissible only because returns of later years are not filed. Return for the years in which the loss and depreciation incurred were filed duly in date hence the same should be carried forward.

Thanks

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santhosh (Student) (1174 Points)
Replied 23 January 2010

as the said loss is belongs to A/y 2004-05 also that year filed return duely..... if there any benefit if files the return now for the subsequent years.... as it is nil return no setoff and all in that susequent years....

shailendra (C.A. FINAL) (189 Points)
Replied 23 January 2010

Dear all please go through the following provisions:-

According to section 139(3) read with sec 72, 72A, 73and 74 if losses is to be carried forward then return must be filed within the time allowed u/s 139.

But it does not apply incase of unabsorbed depreciation. According to the case of Haryana hotels Ltd. vs. CIT (2005), section 139(3) does not apply on unabsorbed depreciation because unabsorbed depreciation is not regulated by section 72 to 74, but bysection 32. According to this case unabsorbed depreciation can be carried forward even if return has not been filed or has been filed late.

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santhosh (Student) (1174 Points)
Replied 24 January 2010

Thank you Mr.Shailendra,

so in my case i may file return for remaining period i.e, from A/y 2005-06 onwards to claim unabsorbed depreciation......

also please tell me the answer for my second question.....

shailendra (C.A. FINAL) (189 Points)
Replied 26 January 2010

Dear Santosh,

For unabsorbed depreciation you are correct. You can carry forward unabsorbed depreciation by filing the returns.

Answer for your second question

Please check out the conditions given in definition of amalgamation given in income tax, if it is satisfied then there will not be any capital gain or gift tax on it, because it is written in section 47 that if the conditions are fulfilled then it will not be regarded as transfer.

Anything more required?

Amir (Learner) (4016 Points)
Replied 26 January 2010

Dear Shailender,

I am taking about Business loss only.....& not unabsorbed depreciation....

I think Santosh wants to ask that if return was filed for the year in which losses were there, but no retuen has been filed for subsequent year, now can losses be carried forward...

I think U cannot carried forward Loss unless u have filed return of all intermediate years...

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shailendra (C.A. FINAL) (189 Points)
Replied 26 January 2010

Dear Amir Sir,

I agree with you that it is necessary to file the returns in time for all the intermediate years.

Actaully i have answered santosh's query on the basis of understanding of only the filing of returns. My answer included the intermediate returns also. Thatswhy i have said that only unabsorbed depreciation can be carried forward NOW.