Set-off & carry forward of business losses

Tax queries 188 views 2 replies

karthick

article assistant

51 Points Joined February 2015

Scenario:
Assessee status - LLP
C/f business losses - Rs. 1.7 Cr (non-speculative)
Unabsorbed depreciation - Rs. 75 lakhs
Taxable book profit - Rs. 1.77 Cr

Query:
While computing AMT tax liability, can the assessee set off both business losses and unabsorbed depreciation in the same AY.

Thank you in advance!!!!

Replies (2)

Sahil Jain (FAFD, DISA, CA)

Practicing Chartered Accountant

2481 Points Joined June 2013

Yes, while computing AMT you can set-off both business losses and unabsorbed depreciation in same AY

Prajjwal Kaushik

Finance Professional

6216 Points Joined August 2014

The bare provisions of the act regarding AMT (s.115JC) reads as "...Adjusted total income referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased by..."

This makes it clear that:

At first, total Income of the assessee shall be calculated as per the normal provisions shall be calculated and then specific adjustments shall be made to it; and
The section overrides provisions of the act, only in respect of the specific adjustments given in the section and all other provisions of the Act such as Advance tax, carry forward of losses shall apply to the assessee shall apply in a normal manner.

Therefore, while calculating AMT in the instant case, carry forward of business loss as well as unabsorbed depreciation shall be allowed in the same AY.