COMMISSIONER OF INCOME TAX Vs. DHADKA COLLIERY CO LTD
LAWS(CAL)-1976-1-27
HIGH COURT OF CALCUTTA
Decided on January 06,1976

COMMISSIONER OF INCOME-TAX Appellant
VERSUS
DHADKA COLLIERY CO.LTD. Respondents




JUDGEMENT

Deb, J. - (1.)In this reference under Section 256(1) of the I. T. Act, 1961, we are concerned with the question as to whether the assessee is eligible for adjustment of losses brought forward from the earlier years. The reference relates to the assessment years 1962-63 and 1963-64. The preceding financial years are the previous years.
(2.)The assessee is a company. The company carries on business in raising coal from mines taken on lease. It also derives income by acting as agent for purchase and sale of coal. The purchase of coal was regulated by permits and the permits were issued only to actual users. The company was a dealer and not a user of coal and, accordingly, it could not effect any purchase. In these circumstances, the company entered into commission agency transactions from which it earned commission. The said agency also enabled the company to sell coal to its customers.
(3.)The company suffered losses in the accounting years 1958 to 1960, which were ascertained by the ITO after taking into account its colliery and the commission activities together. The ITO has disallowed the company's claim to set off those carried forward losses against the profits earned as commission in the assessment years 1962-63 and 1963-64 inasmuch as the assessee has discontinued its coal raising activity which, according to the ITO, is a different business from the existing business in the assessment years concerned.
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