- (1.) Heard Sri RK Upadhayay, learned Senior Standing Counsel and Sri Ashish Bansal appearing on behalf of the respondent.
(2.) This is an appeal under section 260 (A) of the Income Tax Act (herein after referred to as "the Act") relating to the assessment year 1988-89 raising the following substantial questions of law: (1) whether, on the facts and in circumstances of the case, the Tribunal is justified in holding that the business of the assessee remained the same, because the criterion is not the nature of business but the unit of control and common management? (2) whether in view of the proviso to clause (i) of sub section (1) of Section 72 of the Act, the Tribunal is justified in holding that the assessee is entitled to claim of set off of past losses against the income of the current assessment year 1988-89?
(3.) Brief facts of the case are that for the assessment year in dispute, the respondent assessee (herein after referred to as "the assessee") filed the return showing the loss of Rs. 2, 46, 856. 80 Naye Paise. The assessee has claimed the brought forward loss amounting to Rs. 4,49,868/-. It appears that upto the assessment year 1984-85 the assessee was running steel mill and was also deriving commission from M/s Rohtas Industries. During the assessment year 1985-86 there was no manufacturing activity and the source of income of the assessee was commission from M/s Rohtas Industries. During the assessment year 1986-87 plant and machinery of the steel mill was closed and the only source of income of the assessee was the commission from M/s International Electrical Industries, Lucknow. During the assessment year 1986-87 the assessee started a new business of Rake handling of M/s U.P. State Cement Corporation and earned commission.;