9911796707
TMI Blog1986 (3) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ment years 1969-70 to 1974-75 are as follows : ----------------------------------------------------------------------------------------- Accounting Assessment Ready loss Speculative loss Available up to year year assessment year --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,744 Diwali 1973 1981-82 3,44,306 - 1982-83 ----------------------------------------------------------------------------------------- This firm was dissolved on Diwali 1973. As per the dissolution deed dated 10-4-11974, the partner Purshotamlal M. Rungta took over all the assets and liabilities of the business along with the goodwill. It clearly provided that the assessee-HUF shall not have any r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission from engineering construction 1,71,839 Commission from Amritlal B. Shah 33,985 After adjusting the expenses, the net profit was Rs. 2,08,630. The return filed for this year showed a net profit of Rs. 2,08,630. The assessment was completed on a figure of Rs. 6,36,277. 4. Before the ITO, for the first time after the assessment year 1974-75, the assessee claimed that the losses suffered in the assessment year 1969-70 to 1974-75 should be carried forward and set off against the taxable profits of this years. This claim was rejected by the ITO. She found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO and the Commissioner [Appeals] misunderstood the source of the losses. He submitted that the assessee was carrying on business in ready shares during this year also and so the same business had been carried on. He, therefore, submitted that the conditions required by the proviso to section 72[1] of the Income-tax Act, 1961, ['the Act'] were satisfied. He submitted that the business of the firm was one and the same, which has been continued by the assessee. In support of this proposition, he relied on the decision of the Supreme Court in the case of B. R. Ltd. v. V. P. Gupta, CIT [1978] 113 ITR 647. In that case, the assessee-company had incurred a loss in the business of import and sale of fabrics and this business was closed and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit losses in the earlier years, it can be.carried forward and set off in a subsequent year, although in the intervening years the assessee by oversight or otherwise may not have claimed the deduction. However, what we have to see here is whether the business carried on by the firm has been continued to be carried on by the assessee during the relevant previous year. We have seen the assessment order of the firm for the assessment year 1971-72. Therein a net loss of Rs. 1,92,117 had been determined and the loss on account of ready share was Rs. 1,68,404. For the assessment year 1972-73, the net loss determined is Rs. 3,28,404 which it would appear to be from ready shares. The assessment order for 1973-74 shows a loss of Rs. 83,046 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the case of B. R. Ltd. refers to the test of common management and control of the business and interlacing and interlocking. On the admitted facts that the old business was taken over by the other partner and the assessee-HUF walked away from that business without anything, there is no question of unit of control of business. There is no interlacing and interlocking between what was the firm's business and what the assessee is doing now. Taking the narrower view also, we find it very difficult to say that the same busines was being continued. In this connection, the Commissioner [Appeals] has rightly relied on the decision of the Bombay High Court in the case of Hiralal Jeramdas. It is necessary that the business should be continued w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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