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Setoff of losses

janak kumar singhal (assistant) (110 Points)

29 March 2016

Sir, I carry on 3 business. In 2 Business i declare 8% profit u/s 44AD. But there is no sale in 3rd business, and in this business interest exp. is incurred. therefor loss in 3rd business of interest amount incurred during the year. whether loss of 3rd business is set off against profit of business 1 (u/s 44AD) and business 2 (u/s 44AD) is allowed or not.

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3 Replies

Rinky Senger (_) (205 Points)
Replied 29 March 2016

Following points are considered while setting-off business losses from one source with the business income under another source.

Loss from speculative business cannot be set off against any income other than income from speculative business. However, non-speculative business loss can be set off against income from speculative business.
Loss from the business of owning and maintaining race horses cannot be set off against any income other than income from the business of owning and maintaining race horses.
Loss from business specified under section 35AD cannot be set off against any other income except income from specified business (section 35AD is applicable in respect of certain specified businesses like setting up a cold chain facility, setting up and operating warehousing facility for storage of agricultural produce, developing and building a housing projects, etc.).

set off is possible in your case.

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manoj (student) (5205 Points)
Replied 29 March 2016

You can get set off if you are proprietor of all business

Kiresh Shivkar (Practicing CA) (44 Points)
Replied 29 March 2016

Adjustment of business loss from one source is permissible against business income from another source irrespective of whether the Income is computed on presumptive basis or normal basis