M/S. JAIPUR UDYOG LTD. & ANR. vs COMMISSIONER OF INCOME-TAX, DELHI, RAJASTHANAND ANOTHER

The Supreme Court held that under Section 141 of the Income-tax Act, 1961, a provisional assessment cannot involve an inquiry into disputed claims of law and fact, thus the Income-tax Officer erred in disregarding the appellant's loss claims. The Court clarified that Section 80 applies only to regular assessments, and losses can only be carried forward if determined under Section 139. The Court ruled that the Income-tax Officer must give effect to allowances determined in prior regular assessments but cannot adjudicate on new claims during provisional assessments, leading to the quashing of the High Court's decision.