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| *Ostroff, Fair and Company>>>India Taxes |
Whether losses can be carried forward for set off after the holiday period under section 10B of the I.T.Act? |
The company is the 100% E.O.U . Production was commenced in the F.Y 1997-1998. Upto the A.Y 2001-2002, there was only loss and hence the losses were carried forward. From the A.Y. 2002-2003, the company started earning profits and hence claimed exemption under section 10B of the I.t.Act. The period of 10 years lapses in the A.Y 2007-2008. We would like to know whether the losses relating to the period from A.Y 1998-1999 to A.Y 2001-2002 can be carried forward after the holiday period? Unfortunately , under Section 10B(6)(ii)clearly states as below "no loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74, in so far as such loss relates to the business of the undertaking, shall be carried forward or set-off where such loss relates to any of the relevant assessment years 72[ending before the 1st day of April, 2001]; Since the loss was incurred up to Asst Yr 2001-02 in you case, no loss as per the scheme of provision shall be allowed. I would say , your company needed tax planning from beginning for tackling such problem. If the company is transferred to sez area then they can claim for one year if they are full filling the conditions of sez given in the Section 10AA SEZ-special Economic Zones Some Income Tax Book and my knowlege about the tax CA PE2 |
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