COMMISSIONER OF INCOME TAX Vs. AMARSINGHJI MILLS LTD.

JUDGEMENT

(1.) THE Tribunal, Ahmedabad Bench 'A', has referred the following question under Section 256(1) of the IT Act, 1961 (the Act) at the instance of the GIT : Whether the Tribunal is right in law and on facts in holding that the new business carried out can be held to be the same as that of the earlier years, and therefore, the assessee is entitled to the benefit of carry forward and set off of accumulated losses ?

(2.) THE assessment year is 1983 -84 and the relevant accounting period is the year ended on 30th June, 1982. The assessee, a limited company, claimed set off and carried forward of certain business losses which came to be disallowed by the AO.

(3.) THE assessee -company was manufacturing cloth from yarn and then selling the same in the market. During the year under consideration the entire textile unit was sold to Kores India Ltd - It is the case of the Revenue that the assessee started a new business of purchasing grey cloth from the market, sent it for processing and after having it processed sold the same in the open market. Therefore, the assessee was not entitled to benefit under Section 72 of the Act to carry forward and set off the accumulated losses pertaining to textile unit which had been sold off,