9911796707
TMI Blog1979 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... nding March 31, 1960. While making the assessment for the assessment year 1959-60, the ITO set-off the unabsorbed business loss of Rs. 1,58,845 for 1949-50 and Rs. 5,70,952 for 1950-51, against the business income of that year and directed that Rs. 15,50,189 representing the loss remaining unabsorbed should be carried forward. In the assessment proceeding for the assessment year 1960-61, with which we are concerned, the assessee claimed that the unabsorbed loss should be carried forward and set-off against the business income of the current year. The ITO rejected the claim on the ground that the unabsorbed loss related to 1950-51 and could not be carried forward for more than eight years. The assessee pressed the claim in appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward was shorter. Section 16 of the Finance Act, 1955, amended s. 24(2), and as a result of the amendment s. 24(2)(iii) provided that a business loss which was not wholly set off could be carried forward from year to year. Thereafter, Finance (No. 2) Act of 1957 amended s. 24(2)(iii) with effect from April 1, 1957, and in consequence an unabsorbed loss could not now be carried forward for more than eight years. The assessee claims a vested right under s. 24(2)(iii), as it stood before its amendment in 1957, to have the unabsorbed loss of 1950-51 carried forward from year to year until the loss is completely absorbed. The claim is based on a misconception of the fundamental basis underlying every income-tax assessment. It is a cardinal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15,50,189 should be carried forward. That direction has meaning only if the law in force in the assessment year 1960-61 permits the unabsorbed loss to be carried forward into the assessment of that year. The direction by the AAC assumes that the law permits the unabsorbed loss to be carried forward into future years, but as we have seen that is not the law and, therefore, the assessee can derive no advantage from that direction. The assessee relies on the judgment of this court in CIT v. Helen Rubber Industries Ltd. [1962] 44 ITR 714 (SC). That was a case, however, where paragraph 3 of the Taxation Laws (Removal of Difficulties) Order, 1950, operated to divide the previous years to which the provisions of the Travancore I.T. Act, 1946, ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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