Losses Chapter- 14
ICMAP PAST PAPERS THEORECTICAL QUESTIONS
Q. NO. 4(a) Fall 2016
Under the Income Tax Ordinance, 2001, explain what do you understand from the concept of `carry forward
of losses' with regard to each of the following heads of income:
(i) Non-speculation business losses
(ii) Speculation business losses
(iii) Capital losses
Q.NO.3 (a) March 2015 Venus limited is a public listed copy having three (3) subsidiaries. One of its
subsidiaries Mars Limited has been suffering losses for last few years. The Board of Directors of Mars
income tax ordinance, 2001.
Required:
In view of the provisions of section 59B of the income tax ordinance, 2001 you are required to answer the
following:
(i) For how long a continued ownership of the share capital would be required for Venus with Mars
Limited for adjustment of losses surrendered by the Mars against its incomes under the head ‘’income
from business’’ and whose approval with regard to such surrendered losses would be required?
(ii) In case of Mars Limited what percentage of ownership of share capital is mandatory for Venus
Limited?
(iii) For how man tax years Mars Limited can surrender its tax losses and how would its unadjusted
losses be treated after the specified period?
(iv) Which type of losses cannot be surrendered by a subsidiary in favor of holding company and other
subsidiary in the group?
Q. No. 2 (b) August 2012 M/s Ahsan Bilal and Company deals in speculation and non-speculation
business. The company is allowed to set off and carry forward its losses arising out of its
speculation business under section 58 of the Income Tax Ordinance, 2001. The following information
has been extracted from the books of accounts of the company for the year ended June 30, 2012:
(Rupees)
Income from speculation business 550,000
Income from non-speculation business 820,000
Carried forward losses for the last three tax years from speculation business 800,000
In the light of section 58 of the Income Tax Ordinance, 2001 answer the following:
(i) Can the company set off its losses arising out of its speculation business? Briefly state the provision.
(ii) What would be the treatment of unadjusted losses arising out of speculation business under said
section?
(iii) How long losses arising out of speculation business can be carried forward?
(iv) M/s Ahsan Bilal and Company has a loss carried forward for the last three years. Which year
loss will be set off first under the above section?
Q. NO.3 (a) WINTER 2008 What do you understand from the concept of loss carried forward under the
Income tax Ordinance, 2001 with regard to each of the following heads of income?
(i) Income from business. (ii) Speculation business losses. (iii) Capital losses.