Decided on December 23,1994



R.M. Mehta, Accountant Member - (1.) THIS appeal is directed against the order passed by the CIT(A) raising for the consideration of the Tribunal three separate issues which are being disposed of as under:
(2.) The assessee in this case carries on the business of manufacturing ice. It filed a return declaring net income of Rs. 27,500 but came to be assessed at a figure of Rs. 1,06,340 in the status of U.R.F. The ITO rejected the claim for set off in respect of carried forward loss of Rs. 51,151 on the ground that no such loss was available as assessment for assessment year 1985-86 had been completed at Rs. ML It was pointed out to him on behalf of the assessee that claims on account of carried forward unabsorbed depreciation and investment allowance were available being absolutely legal and these could not be rejected. The however disagreed with the assessee and opined that "all the claims" had been considered in determining the figure of Rs. Ml. On further appeal the CIT(A) confirmed the view of the ITO.
(3.) WE have heard both the parties, the learned counsel reiterating the arguments advanced before the CIT(A) and the ITO and the learned D.R. in support of the orders of the tax authorities. In our opinion the action of the tax authorities is not justified either on facts or in accordance with the provisions of law. Taking note of the order of assessment for assessment year 1984-85 we find that return had been filed showing a loss of Rs. 98,370 and assessment was completed at Rs. Ml with the further direction that the "remaining loss" determined in assessment year 1983-84 shall be carried forward "as per law". In assessment year 1985-86 the assessee filed a return showing a loss of Rs. 51,150 which comprised of the net income of Rs. 37,224 for the year in question but adjusted against "brought forward unabsorbed depreciation and investment allowance" to the tune of Rs. 88,375. The ITO "after discussion" took the "income" at Rs. Ml and the tax demand was also Rs. ML;

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