TaxTMI 
TaxTMI 
1962 (1) TMI 6
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....er is entitled to carry forward the loss for a period of six years notwithstanding the fact that during the period when the loss had occurred, the law applicable was the Travancore Income-tax Act ?" The High Court has granted a certificate under section 66A(2) of the Income-tax Act. Two questions were referred to the High Court in compliance with an earlier order of the High Court under section 66(2) ; but with the other question, we are not concerned in this appeal. Messrs. Helen Rubber Industries Ltd. is a company, which was incorporated in the former State of Travancore with its registered office at Kottayam. In the year 1941, the assessee company granted a lease of the factory to certain persons for a period of fifteen years. From t....
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....47 Rs. 31-12-1946) to 16-8-1948) 4031-10-0 1947 (1-1-1947 to 1124 M.E. (17-8-1948 31-12-1947) to 16-8-1949) 6605-1-6 1948 (1-1-1948 to 1125 M.E. (17-8-1949 31-12-1948) to 16-8-1959) 2604-13-9 ------------------------------- Total 13241-9-3 --------------------------------------------------------------------------------------------------------------------------------------------------- The dispute in this case is about the right of the assessee company to carry forward the loss of the year 1946 under the provisions of the Travancore Act read with section 24(2) of the Indian Income-tax Act and the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, to the assessment year, 1951-52, in the assessment of the co....
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....his section, a clear division was made between the operation of the prior law and the Indian Income-tax Act. The assessment for the year 1951-52 was thus made on the assessee company under the Indian Income-tax Act. Under section 24(2) of the Indian Income-tax Act, as it existed prior to its amendment by the Finance Act, 1955, it was provided : "Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March, 1940, under the head 'Profits and gains of business, profession or vocation', and the loss cannot be wholly set off under sub-section (1), the portion not so set off shall be carried forward to the following ye....
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....(August 17, 1947 to August 16, 1948), 1124 (August 17, 1948, to August 16, 1949), 1125 (August 17, 1949 to August 16, 1950) and 1126 (August 17, 1950) to August 16, 1951). These were the only differences between the two sections, and section 24(2) of the Indian Income-tax Act, so modified, can be read as section 32 of the Travancore Act. The existence of these two sections in the two Acts was likely to lead to some difficulty, and a question was likely to arise which law was to prevail. Section 12 of the Indian Finance Act, 1950, therefore, enabled the Central Government to pass an order removing any such difficulty. The Taxation Laws (Part B States) (Removal of Difficulties Order, 1950, was thus passed. Paragraph 3 of that Order provided....
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....d apply. The application of the Travancore Act by paragraph 3 of the Order was limited to the previous year before January 1, 1949, and other earlier previous years. The previous year, with which we are concerned, January 1, 1946, to December 31, 1946, is so clearly a previous year, to which the Travancore Act applies, that it does not admit of any doubt or difference. The matter is thus governed by the Travancore Act. The Travancore Act laid down, inter alia, that a loss arising in the previous year for the assessment for the year ending on the last day of Karkadakom, 1123, could be carried forward for two years. The assessment year for 1123 M. E. covered the period, August 17, 1947, to August 16, 1948, and the previous year of the asses....