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TMI Blog1975 (10) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1964-65 and set off the same against the business income for the assessment year 1968-69 onwards. The relevant facts of this case are: The assessee is a limited company with its registered office at Cochin. The assessee had three branch offices at Alleppey, Calicut and Badagara. It carried on business in hill produce. The assessment for the year 1968-69 was completed on September 27, 1968. The officer determined a profit of Rs. 45,117 for that year. He then allowed the loss determined for the assessment years 1963-64 and 1964-65 to be brought forward and set off against the profit for 1968-69 as shown below: Asst. year Amount of loss brought forward and set off Rs. Asst. year 1963-64 41,738 Asst. year 1964-65 3,379 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head "Capital gains" relating to capital assets other than short-term capital assets and has exercised the option under sub-section (2) of that section or where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and-- (i) it shall be setoff against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year: Provided that the business or profession for which the loss was originally computed continued to be carried on by him in the previous year relevant for that assessment year; and..." The question is whether the business of the assessee had been discontinued. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the conclusion that the company carried on business during the relevant period, and such finding arrived at on the basis of the relevant facts is not a finding of a pure fact but an inference of law drawn from specific facts found. In Commissioners of Inland Revenue v. South Behar Railway Co. Ltd., the House of Lords considered the question whether a company which had become inactive could be said to have discontinued its trade or business. Lord Sumner refers to the activities of the company as follows: "It is obvious that the company's objects have by no means been accomplished. It is obvious, too, that during its present period of dormant life it has very little to do. I do not attach much importance to the domestic operations of dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " On the basis of the above decisions, counsel for the assessee contends that the findings of the Tribunal as regards the discontinuance of the business is an inference of law which can be questioned in these proceedings. The facts specifically found in those cases clearly showed that the business, although dormant, had not been discontinued. From the mere fact of inactivity it could not be inferred that the business had been stopped. In the present case the Tribunal has clearly found that the business had been closed down during the assessment years 1966-67 and 1967-68. The assessee had in fact admitted before the Tribunal in an earlier proceeding for the year 1967-68 that the business had been discontinued. A dispute had then arisen re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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