Law:

Section:

Section 80, read with sections 72 and 32, of the Income-tax Act, 1961 - Losses - Loss return - Assessment year 1985-86 - Whether unabsorbed depreciation and investment allowance stand on a different footing vis-a-vis unabsorbed business losses for purpose of section 80; section 80 does not cover setting off of unabsorbed depreciation and investment allowance and, therefore, adjustments of unabsorbed depreciation and investment allowances of earlier years cannot be denied merely on ground of belated filing of return - Held, yes Circulars & Notifications - Circular No. 397, dated 16-10-1984 FACTS The assessee was a partnership-firm whose original assessment was completed under section 143(1). Subsequently, the Assessing Officer passed revisional order under section 154 withdrawing the allowance of carry forward of depreciation and investment allowance on the ground that there was delay in filing the return of income. The Assessing Officer took the view that under section 80, carry forward of losses could not be allowed if the return was filed late. On appeal, the Commissioner (Appeals) allowed adjustments of unabsorbed depreciation and unabsorbed investment allowance on the ground that carry forward of business losses and carry forward of the unabsorbed depreciation and investment allowance are on different footings and section 80 does not apply to the carry forward of unabsorbed depreciation and unabsorbed investment allowance. On the revenue's appeal, the Tribunal affirmed the order of the Commissioner (Appeals). On reference : HELD From a bare reading of section 80, it is manifestly clear that only such losses, which have been determined in pursuance of a return filed in accordance with the provision of section 139, shall be carried forward and set off which have been provided under section 72(1) or 73(2) or 74 or 74A(3). As a result of amendment of section 80 with effect from 1-4-1985, the determination and carry forward of the loss in case of a belated return is not mandatory. A belated return is a return which is not furnished within time allowed under section 139(1) or within such further time as may be allowed by the Assessing Officer. This amendment…

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