Re: Reduction in Unabsorbed Business Loss

Sir, The case of the assessee was selected for scrutiny and assessment was done u/s 143(3) by making an addition of Rs. 55 lac to the returned income of Rs. (-)52 lac. So, the net income after the above mentioned addition is Rs. 3 lac (55-52). The assessee had carried forward the loss of 52 lac and utilised Rs. 8 lac for set off in 3 subsequent years. Balance unabsored loss of Rs. 44 lac (52 – 8) is yet to be set off as of now. Now the assessee wants to avail the benefit of VsV scheme and ready to pay the disputed tax on assessed income of Rs. 3 lac. Further, the assessee is also ready to pay the tax on the amount utilised for set off of loss ( 8 lac in 3 different years) and forego the balance unutilised loss of 44 lac. Is it possible ? Thanks

The assessee can avail the benefit of the scheme only if appeal is pending as on 31 -1-2020.   Please refer Circular No 9 /2020   dt 22-04 -2020 , issued by the CBDT  which reads as under ; 

Q. no 53 : If loss is not allowed to be adjusted while calculating  disputed  tax, will  that loss be allowed to be carried forward ? 

Ans : As per the amendment  proposed in Vivad  se Vishwas, in a case where the dispute  in relation to an assessment year relates to reduction of Minimum Alternate Tax (MAT) credit or reduction of loss or depreciation, the appellant shall have an option either to (i)  include the  amount  of tax related to such  MAT credit or loss or depreciation in the amount of  disputedtax and carry forward the MAT credit or loss or depreciation or (ii) to carry forward the reduced tax credit or loss or depreciation. CBDT  will prescribe the manner of calculation in such cases. 

 

It is desirable to  wait and reads the clarification of CBDT as and when issued and take the appropriate decision .

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