[aaykarbhavan] Assessee entitled to carryforward business loss determined at assessment stage

KARNATAKA HIGH COURT - Income Tax

Commissioner of Income-tax and DCIT Versus Srinivasa Builders

Validity of order u/s 154 of the Act – Rectification of order - Benefit of carry forward of business loss u/s 80 of the Act – Original return filed not a loss return u/s 139(3) of the Act - Held that:- The assessee had filed return of income declaring the total income on 6-1-1998 - the Assessing Authority once again determined total loss and allowed it to be carried forward - the order allowing the loss to be carried forward was modified invoking Section 154 of the Act - The reasoning of the Appellate Authority that the assessee has not declared the loss within the time specified u/s 139(1) and 139(3) of the Act is factually incorrect – the business loss was allowed to be carried forward - The assessee has not violated any of the conditions u/s 80 of the Act - The assessee had shown positive income in the returns, but in the assessment, the business loss was determined by the AO – thus, the assessee is entitled for the benefit of carry forward of business loss - Whether loss ultimately determined by the Assessing Officer was liable to be carried forward or not, is a debatable issue – Invocation of section 154 is not available for the AO – thus, the order of the Tribunal is upheld – Decided against Revenue

 

Regards

Prarthana Jalan

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