Section 73A

Section 73A — the law in short

What the courts have decided on section 73A, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• International Fresh Farm Products (India) Ltd v ITO ITATHelps taxpayerValidity unconfirmed
  CPC has refused to let me carry forward my s.35AD specified-business loss because the return went in late. Can the officer of the loss year decide that at all?
  On this Tribunal's view, no. Carry forward and set off are two separate stages: the officer of the loss year determines and notifies the loss, and it is the officer of the later year, when set-off is actually claimed, who decides whether s.80 read with s.139(3) bars it. The Bench set aside the CIT(A)'s order and directed the AO/CPC to remove the direction denying carry forward, expressly leaving the due-date objection alive for the year of set-off.
• Sarovar Hotels P Ltd v DCIT ITATHelps taxpayerValidity unconfirmed
  We run hotels out of leased buildings and one unit is loss-making. The AO says only a newly constructed hotel is a specified business, so there is nothing to set off under s.73A. Is he right?
  No, on this Tribunal's reading. 'Building and operating' a hotel in s.35AD(8)(c) means creating a facility and operating it, and creating the facility includes occupying an existing building on lease and making suitable modifications to run the hotel - so a leased-building hotel is a specified business and its loss can be set off under s.73A against the profits of another specified business. But a unit where the assessee only manages hospitality services for someone else's institution, without control of the facility, is not a specified business.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.