1991 (8) TMI 65

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....see was allowed relief under section 80J of the Income-tax Act, 1961 ("the Act" for short), in the earlier years. There was shortfall or deficiency referred to in subsection (3) of section 80J in the earlier years, which had been carried forward. In the year under reference, i.e., the assessment year 1972-73, the assessee, inter alia, claimed set off of the deficiency of the earlier years. The controversy involved in the present reference is with regard to the set off of the deficiency in respect of Unit No. 1 at Bangalore. The assessee's claim was rejected by the Income-tax Officer. In the appeal, however, the Appellate Assistant Commissioner, relying on the decision of the Incometax Appellate Tribunal ("the Tribunal" for short) in the Inc....

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....6(1) of the Act : "Whether the Appellate Tribunal was right in law in holding that the assessee would be entitled under the provisions of section 80J(3) of the Act to carry forward of deficiency either wholly or in regard to the balance of seven assessment years as reckoned from the end of the initial assessment year ? and Whether the Appellate Tribunal was right in law in holding that the assessee would be entitled under the provisions of section 80J(3) of the Act to carry forward the balance for the seven assessment years as reckoned from the end of the initial assessment year in question being the sixth year of the assessee's business ? " As observed above, the controversy in this reference is confined to set off of deficiency, as pro....

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....ins for the next following assessment year and if and so far as such deficiency cannot be wholly so set off, it shall be set off against such profits and gains assessable for the next following assessment year and so on: Provided that (i) in no case shall the deficiency or any part thereof be carried forward beyond the seventh assessment year as reckoned from the end of the initial assessment year ; (ii) where there is more than one deficiency and each such deficiency relates to a different assessment year, the deficiency which relates to an earlier assessment year shall be set off under this sub-section before setting off the deficiency in relation to a later assessment year : Provided further that in the case of an assessee being a co-....