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Issues:
1. Interpretation of section 263 of the Income-tax Act, 1961 regarding disallowance of business loss. 2. Whether the Commissioner of Income-tax was justified in setting aside the order passed by the Assessing Officer. 3. Consideration of past and subsequent assessment records in determining business activities. Analysis: The case involved a dispute regarding the disallowance of a business loss claimed by the assessee. The Commissioner of Income-tax sought a reference to the High Court on the question of law concerning the correctness of the Tribunal's decision to set aside the order passed under section 263 of the Income-tax Act. The Commissioner contended that since no business activity was carried out by the assessee during the relevant year, the claim of business loss should be disallowed. The Tribunal, however, rejected the application, leading to the present proceedings. The Tribunal noted that the assessee had not engaged in any business activity during the year under consideration. The Commissioner's argument was based on the absence of a computation of income or loss under the head "Business" and the lack of business activity as evidenced by the profit and loss account. The Tribunal highlighted that in previous assessments, the interest paid by the assessee was considered a business expenditure, indicating a history of business activities. The Tribunal further examined the assessee's business history, noting involvement in shares, consultancy, commission business since 1978, and agricultural income. It was observed that the loan for purchasing a car was taken during a year when consultancy and commission business activities were ongoing. The Tribunal emphasized the continuity of business activities based on past and subsequent assessment records, concluding that the Commissioner erred in disturbing the assessment order under section 143(3) of the Act. The Tribunal rejected the argument that the absence of income in a particular year should preclude the claim of business loss, emphasizing that business expenses may still be incurred even in non-profitable years. The decision highlighted the Tribunal's consideration of the factual record and the absence of perversity in its findings, leading to the rejection of the application. As no question of law was found to arise, the rule was discharged without costs, and the order was to be kept on record for future reference.
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