Regarding C/fd and set off of loss

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Preeti (Querist)

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)

Thanks.

Preeti

Preeti (Querist)

01 September 2008 Dear all,

Please resolve this query asap.

Thanks.

Jitender

Jitender (Expert)

01 September 2008 1) yes ,it is allowed if roi of a.y 06-07 was filed wilthin time allowed u/s 139(1).
2 loss of rs 100000 will be set-off.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

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

Preeti

Preeti (Querist)

03 September 2008 Thanks All,

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?

Regards.

Preeti

Preeti (Querist)

11 September 2008 Can anybody please reply to this query?????