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TMI Blog1992 (2) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... he tea was not in existence after 1973 ? " The present reference relates to the assessment years 1976-77 to 1981-82. As the questions in all the assessment years are common, the appeal was disposed of by the Commissioner of Income-tax (Appeals) by a consolidated order dated July 19, 1983, allowing the appeal. The Commissioner held that the assessee is entitled to set off the loss incurred in the earlier years. The order of the Commissioner was affirmed by the Appellate Tribunal by a consolidated order dated February 21, 1985, vide annexure 'C' to the paper book. The assessee is a company incorporated in the year 1976 with various objects including acquiring of land for tea plantations, manufacturing of tea, etc., having three tea estates. The assessee-company suspended its manufacturing operations of tea due to unavoidable market conditions and also the financial condition of the company from the accounting year 1974, although it continued to maintain tea plantations and other assets including plant and machinery for manufacturing tea. Subsequently, in the annual general meeting of the company held on June 30, 1977, it was decided to resume manufacturing operations, but could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing tea, viz., the factory, and, as such, it cannot be held that there was discontinuance or suspension of the business of the assessee. According to Mr. Lahiri, whether there was suspension or discontinuance of the business of the assessee being a question of fact and as both the Commissioner and the Tribunal held that there was no discontinuance or suspension of business of the assessee, the said finding is binding on this court. We find considerable force in the submission of learned counsel for the assessee. Incidentally, Mr. Lahiri has urged that the last portion of the question, viz., "even though the condition in the proviso to section 72(1) that the business in which loss was originally computed was not satisfied in this case, as the growing and manufacturing of tea is not in existence after 1973" is not based on the order of the Appellate Tribunal and as such the above portion of the question does not arise and also is not legally framed. In this connection, learned counsel has drawn our attention to the commentaries at pages 1548-1549 of Kanga and Palkivala's The Law and Practice of Income Tax, Eighth Edition, Vol. 1, to bring home the above point. The learned auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue has placed reliance was rendered by the Kerala High Court in S. P. V. Bank Ltd. v. CIT [1980] 126 ITR 773. From the facts of that case, we find that the bank in question was carrying on business in banking till April, 1963, and thereafter, the said business was taken over by another bank. After the take-over, the assessee-bank did not make any fresh advances or receive deposits and the only activity performed by the assessee-bank was taking steps for realisation of the amounts outstanding by way of advances to various parties in order to reduce its liability to the bank which took over the banking business. On these facts, the High Court held that the Tribunal was right in holding that during the relevant assessment years, the assessee did not carry on any business activities and was not entitled to any deduction by way of business expenditure to carry forward the loss. The above ratio is also not applicable to the case in hand as the assessee in the present reference continued its activities as held by the Commissioner and also the Tribunal. Learned counsel for the Revenue has placed reliance on a decision of the apex court in New Savan Sugar and Gur Refining Co. Ltd. v. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany incorporated with the object of buying and developing of landed properties and promoting and developing market. This view of the Tribunal was affirmed by the Calcutta High Court. In reply, Mr. Lahiri, learned counsel for the assessee, has placed reliance on a decision of the apex court in CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306. We find from the judgment that the assesseecompany, which carried on banking business, held securities as part of the trading assets of its business and, for that particular assessment year, the company incurred a loss under the head " Business " and earned interest on securities and there was a net loss. Although the Income-tax Officer allowed this loss to be set off against income computed under the head " Business " he refused to set it off against the income computed under the head " Interest on securities ". On these facts, the apex court held that the scheme of the Income-tax Act is that income-tax is one tax and section 6 of the 1922 Act classifies the taxable income under different heads for the purpose of computation of the net income of the assessee. Although, for the purpose of computation of the income, interest on securi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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