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  • Chapter-V Losses: 57. Limitations On Set Off and Carry Forward of Losses.

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    The document discusses limitations on carrying forward losses in three situations: 1) Losses of an association of persons or firm cannot be set off against other income of members, and must be dealt with under other sections. 2) Losses of a business cannot be set off against other income of a person who did not incur the loss, such as when one person succeeds another in a business. 3) Where full effect cannot be given to depreciation allowances in a year due to lack of profits, the unused allowance can be added to the next year's allowance and subsequent years, after applying provisions for setting off losses.

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    The document discusses limitations on carrying forward losses in three situations: 1) Losses of an association of persons or firm cannot be set off against other income of members, and must be dealt with under other sections. 2) Losses of a business cannot be set off against other income of a person who did not incur the loss, such as when one person succeeds another in a business. 3) Where full effect cannot be given to depreciation allowances in a year due to lack of profits, the unused allowance can be added to the next year's allowance and subsequent years, after applying provisions for setting off losses.

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    Chapter-V Losses: 57. Limitations On Set Off and Carry Forward of Losses.

    Uploaded by

    fazlay
    The document discusses limitations on carrying forward losses in three situations: 1) Losses of an association of persons or firm cannot be set off against other income of members, and must be dealt with under other sections. 2) Losses of a business cannot be set off against other income of a person who did not incur the loss, such as when one person succeeds another in a business. 3) Where full effect cannot be given to depreciation allowances in a year due to lack of profits, the unused allowance can be added to the next year's allowance and subsequent years, after applying provisions for setting off losses.

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    Chapter- V Losses

    57. Limitations on set off and carry forward of losses.(1) In case of an association of persons or firm, any loss which cannot be set off against any other income of the association of persons or firm in accordance with section 52, shall be dealt with as provided under sections 53, 55 and 56 and the share of loss shall not be allowed to set off by any member of association of persons or any partner of the firm against his other income. (2) Where any person carrying on any business or profession has been succeeded in such capacity by another person otherwise than by inheritance, no person, other than the person incurring the loss, shall be entitled to have the loss in such business or profession set off against his income under any other head.

    (3) Where, in making an assessment for any year, full effect cannot be given to the allowances referred to in section 27 (c) owing to there being no profits or gains chargeable for that year or such profits or gains being less than the allowance then, subject to the provisions of subsection (4), the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following year and be deemed to be part of that allowance or if there is no such allowance for that year, be deemed to be the allowance for that year and so on for succeeding years. (4) Where, under sub-section (3), depreciation allowance is also to be carried forward, effect shall first be given to the provisions of sections 53 and 55 (2).

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