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carry forwward

Riya K S (Student) (76 Points)

08 September 2010

If a company has no business income or other income, then its loss can be carried forward or not???

For how many years shares issued for consideration other than cash has to be shown in the company's Balance Sheet??

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8 Replies

Sunshine (Helping All) (10575 Points)
Replied 08 September 2010

yes it can be carried forward...

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CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 08 September 2010

Dear Riya,

If the company has no business income or other income, it can carry forward its loss for the next 8 years and set off the same.

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Sunshine (Helping All) (10575 Points)
Replied 08 September 2010

yeah...for 8 years...nd continuation of business to set off the loss is not necessary...

Sanjay Singh Rana (CA) (208 Points)
Replied 08 September 2010

Yes Upto 8 years from the end of relevent assessment year in which the loss was first computed and also

Assessee must have filed a return of loss u/s 139(3).

:) take care

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Saurabh Toshniwal (ca final) (2358 Points)
Replied 08 September 2010

loss can be carry forward & return should filed

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Vicky (CA, LCS,MCOM,) (136 Points)
Replied 08 September 2010

if the loss is speculation loss then it can be c/f for only 4 AY immediately succeeding the AY in which loss is incurred. ......further the same can be set off in future years only against speculation gains...however if ithe loss is normal business loss then the same is eligible to be c/f for 8 AY......however it can be set off in future against normal business income as well as speculation income......also to become eligible for c/f of business loss,a return shd be filed within the time limits specified u/s 139(1) i.e.30th sept/31st july(as applicable) for the year in which loss is incurred.

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Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 08 September 2010

HI RIYA,

U'R BUSINESS LOSS CAN BE CARRY FORWARD FOR THE NEXT 8 YEARS ONLY, JUST AFTER THE RELEVANT PREVIOUS YEAR IN WHICH LOSS WAS INCURRED IRRESPECTIVE OF IN ANY OF THE NEXT PY, COMAPNY HAS NO BUSINESS INCOME OR OTHER INCOME. AFTER 8 YEARS, BENEFIR OF CARRY FORWARD WOULD GET LAPSED.

HOWEVER, E.G COMPANY HAS INCURRED BUSINESS LOSS OF Rs.100,000 IN PY 2009-2010, IT CAN BE CARRY FORWARD FOR THE PERIOD UPTO PY 2017-2018. IF IN BETWEEN THIS YEARS, COMPANY HAS NO BUSINESS INCOME OR OTHER INCOME IN PY 2013-2014, IT DOESN'T MAKE ANY IMPACT AS THE PERIOD OF 8 YEARS IN CONCLUSIVE WHETHER OR NOT IN THAT 8 YEARS COMPANY HAS CARRY ON BUSINESS OR GENERATING ANY BUSINESS INCOME OR ANY OTHER INCOME. THUS, EVEN IF NO BUSINESS INCOME OR OTHER INCOME DURING A PARTICULAR YEAR, IT WOULD DEFINATELY BE COUNTED FOR THE CARRY FORWARD PERIOD .

SECONDLY, EQUITY SHARES ISSUED OTHER THAN CASH HAS TO BE SHOWN IN BALANCE SHEET UNTIL BUYBACK OF SHARES, DISSOLUTION OF COMPANY.

REGARDS,

MANOJ

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CA Ankit Gulgulia (Jain) (B.COM (H) FCA CIFRS CBV R-ID (IICA) R. Valuer (IBBI)) (5842 Points)
Replied 10 December 2010

All The Above contentions Given by My Friends are correct , but it may happen that in certain Cases AO may Contend that no business income (for more than 1 PY or So) shall mean that Assessee is not performing any business Activities, Thereby Disallowing all the Business Losses .Company must Submit proper Submissions u/s 143(2)/142 to prevent AO from Doing So.