COMMISSIONER OF INCOME TAX Vs. L G BALAKRISHNAN

JUDGEMENT

(1.) THE assessment year is 1979-80.

(2.) DESPITE the absence of provisions similar to Sections 80 and 139(3) with regard to the need for having the loss determined in the relevant assessment year before claiming the right of carry forward of the loss to subsequent assessment years, the Revenue contended before the Tribunal that loss in relation to the agricultural activity of the assessee in earlier years, prior to the assessment year in which agricultural as well as non-agricultural income was returned by the assessee should not be considered. That contention having been rejected by the Tribunal, which upheld the view that was taken by the Commissioner, the Revenue has brought this reference before us for considering the following questions :

(3.) THE assessee in this case had not filed a return in the assessment years prior to the one commencing on the 1st day of April, 1979, and, therefore, there was no determination of the extent of loss, if any, in the earlier assessment years. THE Finance Act of 1979 in rule 9(5) of Part IV of the First Schedule thereto imposed a bar on loss not determined by the Income-tax Officer, under the provisions of those rules and the rules contained in the Finance Acts of earlier years being set off against the income of the assessee for the previous year relevant to the assessment year commencing on the 1st day of April, 1979. That sub-rule does not specify the time at which the loss should have been determined under the rules of the Finance Acts of the earlier years. It does not deal with a situation where an assessee has no non-agricultural income, which is required to be taxed under the Central Act and has incurred a loss in his activities in relation to agriculture. Such a person was not required to file a return during the assessment years commencing on the 1st day of April, 1974, till the assessment year commencing on the 1st day of April, 1979, solely for the purpose of having the loss from the agricultural activities computed. THE annual Finance Acts preceding the year 1979, as also the Finance Act of the year 1979 do not provide for the carry over of the loss from agricultural activities. THE Finance Act is applicable to the concerned year. Those Finance Acts, on the other hand provided that where the net result of the computation made in accordance with the rules contained therein is a loss the same shall be ignored. Those Acts do not provide for carry forward of loss to later years.