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.
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