AJIT KUMAR SENGUPTA, J. - (1.) AT the instance of the assessee, the following question of law has been referred to this Court under s. 256(2) of the IT Act, 1961. "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding the order under S. 263 passed by the CIT for the asst. yr. 1974-75 as correct ?"
(2.) THE facts admitted and/or found by the Tribunal and incorporated in the statement of case are stated hereafter : The assessee is a private limited company. By the assessment order dt. 28th July, 1977, for the asst. yr. 1974-75, the ITO determined the assessee's total income at Rs. 18,322. Subsequently, by the rectification order dt. 16th Jan., 1978, under S. 154 of the Act, the ITO allowed the assessee the benefit of deduction of business losses of Rs. 18,322 pertaining to the asst. yrs. 1968-69, 1971-72 and 1972-73 . Thus, the total income was reduced to "nil" and further business loss of Rs. 14,226 for the asst. yr. 1972-73 was carried forward.
(3.) THE CIT, on going through the records, found the order of rectification passed by the ITO erroneous and prejudicial to the interests of the Revenue because the total income originally assessed at Rs. 18,322 was computed under the head "Other sources". Accordingly, the CIT, after issuing a show-cause notice and after hearing the assessee, passed an order under S. 263 of the Act, cancelling the said rectification order under S. 154 of the Act.;