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Interpretation of Section 24 for setting off losses between distinct businesses in different locations under the Income Tax Act. Analysis: The judgment dealt with the issue of setting off losses between distinct businesses in different locations under the Income Tax Act. The assessee had one profitable business in Bombay and another loss-making business in Indore. The Income-tax Officer and the Appellate Assistant Commissioner initially denied the assessee's claim to set off the loss from the Indore business against the profits from the Bombay business, citing the proviso to Section 24. However, the Tribunal disagreed and allowed the set-off. The Advocate-General argued that the Act does not permit an assessee to set off losses incurred in an Indian State against profits earned in British India, relying on the proviso to Section 24(1). The main section allows an assessee to set off losses under one head against profits under another head. The proviso, in this case, restricts the set-off of losses from an Indian State against profits from the same state exempt from tax under Section 14(c). The Court analyzed the language of the main enactment and the proviso, emphasizing that the proviso cannot restrict the clear and unambiguous terms of the main section. It clarified that different businesses do not constitute different heads under the Income-tax Act. All businesses fall under one head in Section 10, allowing an assessee to set off losses within the same head. Section 24 comes into play only when setting off losses under one head against profits under another head. Ultimately, the Court upheld the Tribunal's decision, stating that the assessee was entitled to set off the loss from the Indore business against the profits from the Bombay business. The judgment clarified the application of Section 24 and the proviso in cases involving distinct businesses in different locations, affirming the assessee's right to set off losses within the same head of business income.
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