2023 (5) TMI 499 - SCH - Income Tax

Deduction u/s 80IA - Applicability of section 79 - No positive profit available for deduction after considering the losses of the previous years to be set off against the income of the current year - As per HC application of section 80IA( 5) of the Act to deny the effect of provisions of section 79 of the Act cannot be sustained as per the Scheme of the Act,1961. When the loss of earlier years have already lapsed, then the same cannot be notionally carried forward and set off against the profit and gains of the assessee's business for the year under consideration in computing the quantum of deduction under section 80IA(1) HELD THAT - This Court is of the opinion that no interference is called for. However, the issue of eligibility of claim, set off of losses for subsequent assessment years (2002-2003 to 2004-2005) is however kept open. The special leave petition is dismissed subject to the above observations.

Summary

The Supreme Court dismissed the special leave petition while keeping the issue of eligibility of claim and set off of losses for subsequent assessment years open. The delay was condoned, and pending applications were disposed of.