The Tax Publishers

Flashes Of : The Latest From Courts/ITAT

Srivatsan Ranganathan

1. LOSS

Carry forward--Assessee not returning brought forward loss in tax return but raising it at the time of assessment by filing belated return

Facts

Assessee in his belated return did not claim the carry forward of losses but at the assessment raised the claim of offsetting brought forward business losses and unabsorbed depreciation against current year income which was not entertained by the AO and by the CIT(A). On further appeal.

Held

In favour of the assessee by remanding back to the CIT(A) by giving fresh opportunity to adjust the brought forward losses.

'As per the statute, the business loss cannot be carried forward to subsequent years, if the return is not filed in time as provided in the statute. However, the same does not apply to the adjustment of brought forward business loss from the income of the current year.'

-- Vide Shanti Refrigeration Industries v. ACIT ITA No.6379/Del/2017, dt. 27 February, 2018 (Del-Trib) [ 2018 TaxPub(DT) 955 (Del 'SMC'-Trib)]

2. MAT

Retrospective amendment in MAT provisions thereby triggering interest under Sections 234B and 234C--Validity of levy

Facts

Assessee in AY 2007-08 was assessed to tax under MAT provisions. MAT law was amended retrospectively w.e.f. 01-04-2001 vide Section 115JB Explanation 1(h) insertion in Finance Act, 2008 and Explanation 1(i) in Finance Act, 2009 by virtue of which deferred tax liability and bad debt provisions got added to the MAT workings thus enhancing MAT liability on which AO levied Section 234B/234C interest upheld by CIT(A). On further appeal by assessee citing that the liability to pay advance tax as per the then existing law meant assessee was not in short fall of payment of advance tax. The retrospectivity of the provision was not something thought over as grounds of appeal.

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