- (1.) ON an application under S. 256(1) of the IT Act, 1961, the Tribunal has referred the following question for our opinion : "Whether, on the facts and in the circumstances of the case, the learned Tribunal is justified in law in allowing the carry forward of the losses of earlier years amounting to Rs. 11,34,420 claimed by the assessee-company ?"
(2.) THE assessee is M/s C. Still export GmbH and the assessment year is 1981-82. The assessment was completed under S. 143(3) r/w S. 144B of the IT Act, 1961, on a total income of Rs. 10,44,680. In computing the income the AO has allowed the set off of earlier years' losses, from the asst. yrs. 1973-74 to 1980-81 amounting to Rs. 11,34,420. In appeal before the CIT(A), the CIT(A) has enhanced the income under S. 251(1)(a) of the Act and the carry forward and set off of loss of Rs. 11,34,420 which was allowed by the AO has been disallowed, the ITO was directed to recompute the total income disallowing the loss of Rs. 11,34,420. In appeal before the Tribunal, the Tribunal has taken the view, though the contract was completed in 1978, the assessee still had the office in India with a hope to get a fresh contract, therefore, it amounts to carry on business during the earlier years. None appeared for the assessee though the matter was listed 5/6 times. Heard the learned counsel for the Revenue.
(3.) LEARNED counsel for the Revenue submits that assessee is NRI. The assessment was completed under S. 143(3) of the Act and total income was assessed of Rs. 10,44,680. Against that income the AO allowed to set off of earlier year's losses from the asst. yrs. 1973-74 to 1980-81 amounting to Rs. 11,34,420 in the year under consideration that is in year 1981-82, while the assessee has closed its business in 1978. When in the preceding year assessee has not carried on any business in India there is no question of set off of losses he suffered in the preceding years against the income in the year under consideration.;