Temporary business suspension does not equal discontinuance, and business loss carry forward remains available despite procedural objections.

Temporary suspension of business, supported by continuing stock, management activity, corporate compliance and revival efforts, does not amount to discontinuance; the assessee remained entitled to computation and carry forward of business loss. A departmental objection that an appeal against an assessment made under the draft assessment procedure was not maintainable was also rejected, because the applicable appellate right had been recognised and the objection had already been negatived by the Special Bench. The assessee's claim and maintainability of the appeal were therefore upheld.

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Issues: (i) Whether the assessee's business had been discontinued or was only temporarily suspended, so as to deny computation and carry forward of business loss. (ii) Whether the departmental objection that the assessee could not maintain an appeal against the assessment framed under the draft assessment procedure was sustainable.

Issue (i): Whether the assessee's business had been discontinued or was only temporarily suspended, so as to deny computation and carry forward of business loss.

Analysis: The record showed that the assessee had not abandoned its business but had suffered only a lull caused by financial difficulties and lack of sales. The existence of stock, continuing management activity, maintenance of corporate formalities, and efforts to revive sales and secure alternative business arrangements indicated that the business remained in existence. Mere inactivity or suspension for a period did not amount to cessation of business where the intention to continue was still evident.

Conclusion: The business was only temporarily suspended and not discontinued; the assessee was entitled to computation and carry forward of business loss. This finding was in favour of the assessee.

Issue (ii): Whether the departmental objection that the assessee could not maintain an appeal against the assessment framed under the draft assessment procedure was sustainable.

Analysis: The objection had already been considered by a Special Bench and the same view was followed. The procedural ground raised by the department was therefore not accepted.

Conclusion: The departmental objection failed and the assessee's appeal remained maintainable. This finding was against the department and in favour of the assessee.

Final Conclusion: The departmental appeals were rejected, the order of the first appellate authority was sustained, and the assessee's claim for business loss and its carry forward remained allowed.

Ratio Decidendi: A business that is only temporarily suspended, with continuing intention and efforts to revive operations, is not treated as discontinued for the purpose of computing and carrying forward business loss; a procedural objection to maintainability based on the draft assessment process fails where the applicable appellate right is recognized.

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