COMMISSIONER OF INCOME TAX Vs. HINDUSTAN MARBLES LIMITED

JUDGEMENT

(1.) AT the instance of the CIT, the Tribunal, Ahmedabad Bench 'A' has referred the following three questions of law arising out of its order dt. 24th Aug., 1981 in ITA No. 1224/Ahd/80 relating to the asst. yr. 1974 -75 :

(2.) THE facts as found by the Tribunal are that the assessee had claimed set off in respect of carried forward business loss and unabsorbed depreciation. In the first instance the ITO has completed the assessment as per the claim of the assessee. However, proceedings under s. 147(b) were initiated against the assessee and as a result of reassessment the ITO withdrew the set off in respect of carried forward business losses and unabsorbed depreciation, and taxed the assessee at the rate applicable to trading company at 65% along with surcharge and not as industrial company.

(3.) THE assessee had raised the same contention before the ITO. As regards the contention of the assessee that the assessment has been reopened without jurisdiction, the same was rejected by stating that there was information that the income chargeable to the tax has been underassessed. However, what was that information and whether that information having any nexus with the escapement of assessment came to the knowledge of the Assessing Officer (AO) after the assessment was not stated. On merit it was held by the ITO that the two conditions prescribed under s. 79 for disallowing set off of carry forward losses and unabsorbed depreciation of earlier years in the relevant previous years are disjunctive and even if one of them is not satisfied the assessee is not entitled to set off the carry forward losses. However, nothing was stated whether the assessee is an industrial company or trading company, but tax was charged at 65% along with surcharge.