2025 (12) TMI 167

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.... cross objection contending that the tax effect in the appeal of the Revenue is below the monetary limits as fixed by the CBDT vide Circular No.9/2024 dated 17.09.2024. Assessee also contended in the cross objection that CIT(A) has rightly allowed carry forward of losses. 2. Heard rival contentions, perused the orders of the authorities below. On perusal of the assessment order, we noticed that the AO while completing the assessment made disallowance in respect of PF & ESI contributions relating to employees contributions and also denied carry forward of current year losses. On appeal the Ld. CIT(A) sustained the disallowance so far as the PF & ESI contributions are concerned following the decision of the Hon'ble Supreme Court in the cas....

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....y in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless on the last day of the previous year the shares of the company carrying not less than fifty-one per cent, of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent, of the voting power on the last day of the year on years in which the loss was incurred." 8.2 In accordance with the provisions of section 79 of the Act, loss incurred by a company in any year prior to the, previous year shall not be allowed to be carried forward and set off against the income of the ....

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.... assessee may be regarded as following a vocation. The remuneration must, therefore, be computed u/s 10 of the IT Act 1922 and loss of profit suffered in that vocation any year may be carried forward to the next year and be set off against the profit of the succeeding year." 8.4 As stated herein above, the appellant had incurred a loss during the year and as such question of claiming set off of brought forward losses of earlier year does not arise. In view of above facts and legal proposition, the order passed by AO u/s 143(3) of the Act rejecting the claim for carry forward of business losses of earlier year invoking the provisions of section 79 of the Act is contrary to the law. The provisions of section 79 of the Act are not app....

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.... losses. Thus, we sustain the order of the Ld. CIT(A) on this issue. 6. Even otherwise, since the revenue effect in the appeal of the Revenue is NIL the same is liable to be dismissed in view of the Circular of CBDT No.9/2024 dated 17.09.2024. 7. Coming to the cross objection filed by the Assessee ground no.1 is in respect of monetary limit is less than Rs. 60 lakhs and the same is allowed. 8. Ground nos. 2 & 3 are only in support of the order of the Ld. CIT(A) in directing the AO to allow carry forward of losses and since we have sustained the order of the Ld. CIT(Appeals) these grounds need not be adjudicated. 9. Lastly coming to the ground no.4 of the cross objection which is in respect of the employees contribution to PF & E....