72. Carry forward and set off of business losses

5 judgments cite this provision SC

72 Carry forward and set off of business losses

(1) Where for any assessment year, the net result of the computation under the head "Profits and gains of business or profession" is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off or, where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and—

(i) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year;

(ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on:

Provided that where the whole or any part of such loss is sustained in any such business as is referred to in section 33B which is discontinued in the circumstances specified in that section, and, thereafter, at any time before the expiry of the period of three years referred to in that section, such business is re- established, reconstructed or revived by the assessee, so much of the loss as is attributable to such business shall be carried forward to the assessment year relevant to the previous year in which the business is so re-established, reconstructed or revived, and—

(a) it shall be set off against the profits and gains, if any, of that business or any other business carried on by him and assessable for that assessment year; and

(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall, in case the business so re-established, reconstructed or revived continues to be carried on by the assessee, be carried forward to the following assessment year and so on for seven assessment years immediately succeeding.

(2) Where any allowance or part thereof is, under sub-section (2) of section 32 or sub-section (4) of section 35, to be carried forward, effect shall first be given to the provisions of this section.

(3) No loss (other than the loss referred to in the proviso to sub-section (1) of this section) shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. 1376 1377 2536 2537 2538 2539 2540 2541 2588 2589 2590 2591 2592 2593 2594 2595 2596 2597 2598 2599 2600 2601 2602 2603 2604 2605 2606 2607 2608 2609 2610 2611 2612 2613 2614 1376 Subs. by Act 11 of 1987, s. 74, for “sub-section (1) of section 74” (w.e.f. 1-4-1988). 1377 Clause

(iii) omitted by Act 38 of 1993, s. 11 (w.e.f. 1-4-1993). 2536 Ins. by Act 26 of 1997, s. 38 (w.e.f. 1-4-1997). 2537 Ins. by Act 18 of 2005, s. 35 (w.e.f. 1-4-2006). 2538 Subs. by Act 21 of 2006, s. 23, for sub-sections

(2) and

(3) (w.e.f. 1-4-2007). 2539 Ins. by Act 7 of 2017, s. 46 (w.e.f. 1-4-2018). 2540 Subs. by, s. 46, ibid., for “tenth assessment year” (w.e.f. 1-4-2018). 2541 Ins. by Act 10 of 2000, s. 51 (w.e.f. 1-4-2001). 2588 Ins. by Act 23 of 2012, s. 48 (w.e.f. 1-4-2001). 2589 Ins. by Act 28 of 2005, s. 27 and the Second Schedule (w.e.f. 10-2-2006). 2590 Ins. by Act 8 of 2011, s. 18 (w.e.f. 1-4-2012). 2591 Ins. by Act 28 of 2016, s. 55 (w.e.f. 1-4-2017). 2592 Ins. by Act 8 of 2011, s. 19 (w.e.f. 1-4-2012). 2593 Subs. by Act 23 of 2012, s. 49, for “LIMITED LIABILITY PARTERSHIPS” (w.e.f. 1-4-2013). 2594 Subs. by s. 50, ibid., for section 115JC (w.e.f. 1-4-2013). 2595 The “word” omitted by Act 25 of 2014, s. 39 (w.e.f. 1-4-2015). 2596 Subs. by s. 39, ibid., for “under section 10AA” (w.e.f. 1-4-2015). 2597 Ins. by s. 39, ibid. (w.e.f. 1-4-2015). 2598 Ins. by Act 13 of 2018, s. 38 (w.e.f. 1-4-2019). 2599 Subs. by Act 23 of 2012, s. 51, for “a limited liability partnership under section 115JC shall be allowed to it” (w.e.f. 1-4-2013). 2600 Ins. by Act 7 of 2017, s. 48 (w.e.f. 1-4-2018). 2601 Subs. by Act 7 of 2017, s. 48, for “tenth assessment year” (w.e.f. 1-4-2018). 2602 Subs. by Act 23 of 2012, s. 52, for “a limited liability partnership” (w.e.f. 1-4-2013). 2603 Ins. by s. 53, ibid. (w.e.f. 1-4-2013). 2604 Subs. by Act 25 of 2014, s. 40, for clause (b) (w.e.f. 1-4-2015). 2605 Ins. by s. 40, ibid. (w.e.f. 1-4-2015). 2606 Subs. by Act 13 of 2018, s. 39, for clause (b) (w.e.f.1-4-2019). 2607 Ins. by s. 39, ibid. (w.e.f. 1-4-2019). 2608 Clause

(c) omitted by Act 23 of 2012, s. 54 (w.e.f. 1-4-2013). 2609 Subs. by Act 23 of 2012, s. 54, for “a limited liability partnership on its total income” (w.e.f. 1-4-2013). 2610 Ins. by Act 13 of 2018, s. 39 (w.e.f. 1-4-2018). 2611 Ins. by Act 23 of 2012, s. 55 (w.e.f. 1-4-2013). 2612 Ins. by Act 28 of 2016, s. 56 (w.e.f. 1-4-2017). 2613 Chapter XIIC consisting of sections 115K to 115N omitted by Act 26 of 1997, s. 39 (w.e.f. 1-4-1998). Earlier Chapter XIIC was inserted by the Act 18 of 1992, s. 58 (w.e.f. 1-4-1993). 2614 Ins. by s. 40, ibid. (w.e.f. 1-6-1997).