1961 (3) TMI 3 - SC - Income Tax

Summary

Issues:
1. Competency of the assessee to raise a question regarding the determination of loss for a previous assessment year during the proceedings of a subsequent assessment year.
2. Whether the loss suffered by the assessee from his personal business can be set off against his taxed share income from an unregistered firm.

Detailed Analysis:

Issue 1:
The case involved an appeal by the Commissioner of Income-tax against an individual assessee, who had received his share of assets from a firm and started his own business. The assessee had incurred losses in his individual business, and the Income-tax Officer determined the loss to be carried forward. In subsequent years, the assessee claimed a higher loss to be carried forward, which was not accepted by the Department. The High Court held that the assessee was entitled to have the loss re-determined in a subsequent year as the procedure under section 24(3) was not followed. The court noted that since the Income-tax Officer had not notified the loss computed in writing, the assessee had the right to challenge the determination of the loss. The court upheld the High Court's decision, stating that the assessee was entitled to have the loss re-determined in a subsequent year, despite the Department's lack of concern regarding the decision due to the assessee's subsequent losses.

Issue 2:
The second issue revolved around whether the loss suffered by the assessee from his personal business, including his share of loss from another firm, could be set off against his taxed share income from an unregistered firm. The Tribunal had accepted the assessee's contention that the profits from the unregistered firm could not be set off against the loss in his individual business. The High Court also ruled in favor of the assessee on this issue. The Commissioner conceded that this issue had been decided against the Department in a previous case. Therefore, this part of the case was not argued further. The court dismissed the appeals, upholding the High Court's decision on this issue as well.

In conclusion, the Supreme Court upheld the High Court's decision on both issues, ruling in favor of the assessee. The appeals were dismissed with costs, and it was noted that the assessee was entitled to have the loss re-determined in a subsequent year.