Law:

Section:

Section 72, read with sections 72A and 78(2), of the Income-tax Act, 1961 - Losses - Carry forward and set-off of business losses - Assessment years 1994-95 and 1995-96 - Four registered co-operative societies were merged into assessee-federation with all their assets and liabilities - Business continued even after merger - Whether four co-operative societies and newly-formed assessee-federation could be treated as one and same assessee - Held, no Section 72A of the Income-tax Act, 1961 - Losses - Carry forward and set-off in case of amalgamation - Whether section 72A is applicable to co-operative societies - Held, no Section 78 of the Income-tax Act, 1961 - Losses - Carry forward and set off in case of succession, etc. - Whether in view of facts stated under heading 'Losses - Carry forward and set-off of business losses', whether, after merger, it could be said that assessee-federation had succeeded to or inherited four societies - Held, no FACTS As a result of order of the Registrar of the co-operative societies, four registered co-operative societies in which State Government had major shareholding merged with all their assets and liabilities into the assessee-federation with effect from 1-4-1993. Therefore, the said societies ceased to exist as corporate bodies. The business of the four co-operative societies continued but under the new name of the assessee-federation. The assessee-federation filed its return of income for the assessment years 1994-95 and 1995-96 and claimed set-off of brought-forward losses suffered by the said four co-operative societies under section 72. The Assessing Officer negatived the claim. On appeal, the Commissioner (Appeals) confirmed the view taken by the Assessing Officer. The Tribunal considered sections 72A and 78(2) and held that the assessee was not entitled for carry forward and set off of losses. On appeal : HELD It is true that while interpreting the provisions of the Act, meaning should not be given to the word which results in absurdity, hardship or injunction, but, at the same time, to infer the intention of the Legislature, the plain language of the provision should not be ignored which is borne out from the plain…

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