Section 72 of the Income Tax Act
Income-tax Act, 2025: s.112
Section 72 of the Income-tax Act, 1961 corresponds to section 112 (Carry forward and set off of business loss) of the Income-tax Act, 2025.
Read section 112 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 72 is Bush Boake Allen (India) Ltd. v. ACIT (273 ITR 152), cited in 29 of the 386 judgments on BharatTax that turn on this section.
Leading authorities on Section 72
Allocation of R&D expenditure to eligible units is not clearly warranted when R&D units are maintained within manufacturing units and not as independent entities. This is particularly relevant when the Assessing Officer allocates R&D expenses to Export Oriented Units (EOUs) in the ratio of turnover, and the Commissioner (Appeals) has deleted such additions.
The Tribunal can allow the admission of additional evidence at the appellate stage if the assessee demonstrates a substantial cause for not producing it before the lower authorities. This discretion must be exercised judiciously, not arbitrarily.
Electrical installations, including wiring, call bells, buzzers, and door locks, are considered furniture and fittings, not plant and machinery, and are thus eligible for depreciation at the rate of 10%.
An assessee is not legally required to file a return within the time prescribed under Section 139(1) to carry forward and set off unabsorbed depreciation.
Common corporate expenses should not be allocated when computing the profit of an SEZ unit, if the expenses were not incurred for that specific unit.
