Deb, J. - (1.) The following question is involved in this reference under Section 256(1) of the I.T. Act, 1961 "Whether, on the facts and in the circumstances of the case, the Tribunal was right in rejecting the assessee's claim for. adjustment of unabsorbed depreciation of the earlier years against the income of the assessment years 1969-70 and 1970-71 ?"
(2.) The assessment years involved are 1969-70 and 1970-71, for which the relevant previous years ended on 31st December, 1968, and 31st December, 1969, respectively. The assessee is a company. In earlier years, the assessee ran a cotton mill at Morvi in the State of Gujarat. The said business was closed long long ago and in those earlier years there was some unabsorbed depreciation which remained unadjusted.
(3.) During the relevant accounting years the assessee earned income from rent collected in respect of workers' chawls, sale of scrap, machinery, articles, etc., and also income under Section 41(2) of the Act in the assessment year 1969-70. The assessee also claimed certain losses from the business which were disallowed by the ITO with a rinding that the assessee did not carry on any business in the accounting years.;