INCOME TAX ACT, 1961

Section 80 read with Section 139(3)

Loss - Carry forward and set off - Originally return filed under section 139(1) showing positive income - Later revised return filed under section 139(5) declaring loss

Assessee originally made a return under section 139(1) showing positive income. Later, within the time provided under section 139(5), a return of loss was filed. The assessee sought to carry forward of such business loss which remained after setting off against the income. Revenue took the view that the assessee having filed return under section 139(1), could not file a revised return under section 139(5) and sought it to be treated as one filed under section 139(3). Held: When a revised return under section 139(5) is filed, it only substitutes the original return filed under section 139(1). The return hence permits set off of the loss against the income of that relevant previous year. What remains after such set off cannot be carried forward for reason of the revised return not being deemed to be one under section 139(3). Hence, the assessee would not be entitled to carry forward the business loss, which was determined in pursuance of return filed under section 139(5).

REFERRED : CIT-V, New Delhi v. M/s. Nalwa Investment Ltd. (2010) 322 ITR 233 (Delhi): 2010 TaxPub(DT) 337 (Del-HC) CIT v. Haryana Hotels Ltd. (2005) 276 ITR 521 (P&H): 2005 TaxPub(DT) 1403 (P&H-HC) Shri Vallabh Glass Works Ltd. v. ITO, Companies Circle VIII, & Ors. (1995) 212 ITR 433 (Guj): 1995 TaxPub(DT) 120 (Guj-HC) Sujani Textiles (P) Ltd. v. Asstt. CIT. (2003) 84 TTJ 696 (Mds): 2004 TaxPub(DT) 398 (Mad-Trib)

FAVOUR : Against the assessee

A.Y. : 2006-07

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