COMMISSIONER OF INCOME TAX Vs. RAVICHANDRAN

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal referred the following question for the opinion of this court under section 256(1) of the Income-tax Act, 1961 :

(2.) THE assessee is a partner in the firm by name Sri Abirami Cotton Mills. THE assessee is deriving income from property and share income from three firms. He was also a partner in a firm by name Sri Abirami Cotton Mills, which has been incurring losses year after year right from its inception. That firm was sold as a going concern in the course of the assessment year 1978-79. THE assessee had certain carried forward losses and unabsorbed depreciation relating to this firm. THE assessee claimed that this carried forward business loss and unabsorbed depreciation of Rs. 40,827 should be set off against his income for the assessment year 1979-80, which is the year under consideration. THE Income-tax Officer negatived the assessee's claim on the ground that as the business of Sri Abirami Cotton Mills in which the loss was incurred had been closed down, the carried forward loss could not be set off.