- (1.) The above matter arises out of the reference made by the learned Income Tax Appellate Tribunal, Calcutta basing on the statement of case which is as follows: The Assessee/Respondent J. K. Corporation is the company and was formerly known as Straw Products Ltd. (in short "SPL") and on change the present name is assumed with effect from June 17, 1994.
(2.) On or about January 25, 1994, one M/s. Orissa Synthetic Limited (in short "OSL") was declared a sick industrial undertaking and by an order of the company court this company was amalgamated with the then SPL being the present Assessee with a new name. The Assessee for the assessment year 1992-93 filed its returns of income on December 31, 1992, being the due date, declaring a total income of Rs. 23.58 crores. The notice under Section 143(2) was issued on November 26, 1993. Thereafter the Assessee filed another return stated to be a revised one on March 31, 1994, claiming total loss of Rs. 152.12 crores. This loss consisted of Rs. 7.97 crores pertaining to M/s. SPL and Rs. 134.15 crores pertaining to M/s. OSL, the amalgamated company. The loss of OSL included as follows: (i) unabsorbed business loss for earlier years, (ii) current year's business loss from February 1, 1992 to March 31, 1992, (iii) unabsorbed depreciation allowance for earlier years, and (iv) unabsorbed investment allowance for earlier years.
(3.) The above claim of set off and carry forward of loss attributed to M/s. OSL was pursuant to the order of the Board for Industrial and Financial Reconstruction (hereinafter referred to BIFR, dated January 25, 1994, sanctioning a scheme for rehabilitation of M/s. OSL The said OSL made a reference in 1990 and upon observing procedure namely appointment of operating agency, preparation of the above scheme for amalgamation/merger and upon deliberation the said scheme was ultimately sanctioned for rehabilitation by way of amalgamation/merger of OSL with the Assessee. Subsequently, the BIFR also passed an order on March 17, 1994, whereby it amended the scheme incorporating sub Clauses (d) and (e) to Clause 4C of the scheme and also issued a declaration under Section 72A(1) of the Income Tax Act 1961, (hereinafter referred to as the said Act). The BIFR also issued certificate under Section 72A(2)(ii) of the said Act on May 15, 1994 and passed an order on August 28, 1995, to the effect that it had issued certificate under Section 72A(2)(ii) on May 15, 1994, and it was observed that if that certificate is filed with the returns subsequently it would be deemed to be due compliance under Section 72A of the said Act. The said scheme of BIFR by its order made it retrospective operation with effect from February 1, 1992. Obviously, taking benefit of the said date of effect the Assessee-company claimed losses in the case of M/s. OSL for the period February 1, 1992 to May 31, 1992 in the hands of the Assessee. The Assessee filed the certificate dated May 15, 1994, issued by the BIFR as aforesaid with the Assessing Officer on August 8, 1994. On March 31, 1994, the Assessee filed another return stated to be the revised one. The assessment was made under Section 143(3) on March 31, 1995.;