- (1.) The question of law referred to the High Court for its opinion under Section 66(1) of the Indian Income tax Act, 1922 is: whether on the facts and in the circumstances of the case, the assessee was entitled to set off against its business profits for the assessment years 1955-56 and 1956-57 any business loss it had incurred in the accounting periods relevant to the assessment years 1950-51 to 1954-55 (both-inclusive). The High Court has answered this question against the assessee and in favour of the department. The assessee has come up in appeal to this Court by special leave.
(2.) In this court, Mr. S.T. Desai appearing for the assessee does not press the appeal in respect of the assessment years 1950-51 and 1951-52. So far as the other assessment years are concerned the question of law arising for decision is concluded by the decision, of this Court in Commissioner of Income tax Punjab v. Kulu Valley Transport Co. (P) Ltd.,77 ITR 518. In view of that decision. Solicitor General appearing for the Commissioner of Income-tax concedes that the question has to be answered in favour of the assessee. In the result this appeal is partly allowed. We discharge the answer given by the High Court, and in its place we answer the question thus : "On the facts and in the circumstances of the case the assessee was entitled to set off against his business profits for the assessment years 1955-56 and 1956-57 any business loss incurred by it during the accounting periods relevant to the assesment years 1952 53, 1953-54, and 1954-55, but it is not entitled to set off the losses incurred by it in the years 1950-51 and 1951-52 towards the business profits in the years 1955-56 and 1956-57." The parties will bear their own costs in this appeal.;