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2023 (1) TMI 313 - AT - Income TaxSet-off of brought forward business losses against current year business income - due date of filing of ITR u/s 139(1) - It is audit case or not - action of the AO/CPC not allowing set-off - main contention of assessee is that the due date for it should be taken as 30th September, since its accounts are required to be audited as per trust deed - HELD THAT:- The requirement of getting accounts audited should be “under the Income tax Act or under any other law”. Hence it is required to be examined as to whether the accounts of the assessee are required to be audited under the Income tax Act or under any other law. We notice that the ld CIT(A) has given clear finding that the accounts of the assessee are not required to be audited under the Income tax Act or under any other law. Before us also the assessee failed to bring to our notice any specific provision under any law which mandates that the assessee’s books of account need to be audited. Therefore, we agree with the view taken by Ld CIT(A) that the assessee has to file its ROI on or before 31st July as per the clause (c) of Explanation 2 of section 139(1) of the Act. We note that the assessee is not required to audit its books as per the Income Tax Act or under any other law and therefore clause (a)(ii) of section 139(1) of the Act is not attracted to the assessee’s case. Therefore, the action of the Ld.CIT(A) in confirming the action of CPC/AO cannot be faulted. So we confirm the action of the Ld.CIT(A) on this issue. Alternative contention is whether the principal portion of loan waived by the lender would be liable to be taxed u/s 41(1) of the Act or not ? - A perusal of Profit and Loss account would show that the assessee has credited the P & L account with the waiver of interest portion and waiver of principle portion of loan. A perusal of the computation of total income would show that the assessee has not excluded principal portion of loan waived from the Net profit shown in the Profit and Loss account. Hence all facts relating to this issue is available on record. Thus the principal portion of amount waived by the lender credited to the Profit and Loss account is not liable to taxation under the Income tax Act. Accordingly, we direct the assessing officer to exclude this amount while computing total income of the assessee.
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