Commissioner of Income Tax vs Structural and Mfg. Co. (P.) Ltd.

D.N. Baruah, J.—This income tax reference u/s 256(1) of the income tax Act, 1961 (''the Act'') has been made at the instance of the revenue. The following question has been referred for opinion of this Court: "Whether, the Tribunal did not err in law as well as on facts in sustaining the order of the Commissioner (Appeals) who directed the Assessing Officer to carry forward the loss for the assessment year 1984-85 ?"

The assessee has the status of a closely held industrial company following the mercantile method of accounting. It filed return on 12-11-1984 for the relevant year in question, the previous year ending on March 31, showing a total loss of Rs. 2,88,930. The Assessing Officer issued notice u/s 143(2) of the Act. In response thereto accounts were produced which were examined by the ITO. He computed the total income as per his assessment order and arrived at a total loss of Rs. 2,13,650. He also gave a finding therein that the loss shall not be carried forward as the assessee did not file its return of income within time as required u/s 139(1) of the Act. Being aggrieved, the assessee went in appeal before the Commissioner (Appeals). The Commissioner (Appeals) directed the ITO to allow carry forward of loss to the assessee as determined in the assessment years 1982-83 and 1984-85 on the reasoning that since the assessee had filed returns for the assessment years 1982-83 and 1984-85, the benefit of carry forward of loss could not be denied to the assessee. The revenue went in appeal against the said order of the AAC before the Tribunal and the Tribunal upheld the order of the Commissioner (Appeals). Thereafter, at the instance of the revenue, the above question has been referred to this Court for opinion. 2. We have heard Mr. D.K. Talukdar, the learned standing counsel for the revenue and Mr. R.K. Joshi, the learned counsel for the respondent.

Mr. D.K. Talukdar, the learned standing counsel, submits that this income tax reference is squarely covered by a decision of this Court rendered in income tax Reference No. 1 of 1990 dated 3-1-1995, wherein following the decision of the Apex Court rendered in Commissioner of Income Tax, Punjab Vs. Kulu Valley Transport Co. P. Ltd., , this Court answered the reference in the affirmative and against the department. We find that the present reference is squarely covered by the decision rendered by this Court in income tax Reference No. 1 of 1990. Accordingly, we answer the reference in the affirmative, i.e., in favour of the assessee and against the department. On the facts and circumstances of the case, there will be no direction as to costs.