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TMI Blog1964 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... mily. It enjoys income from property and interest on securities. It also derives income from business. Income from this business has suffered tax under the Income-tax Act,1918. On March 30, 1949, by virtue of a partial partition of the family assets, the business passed from the hands of the family to a partnership firm. For the assessment year 1948-49, the relevant previous year being the financial year ending March 31, 1948, the assessee claimed the benefit of section 25(4) by the substitution of the income of the broken period, April 1,1948, to March 30, 1949, in place of the income actually earned in the previous year April 1, 1947, to March 31, 1948. During the broken period, April 1, 1948, to March 30, 1949, the assessee had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 949-50. We are of opinion that the set-off cannot be allowed. The Indian Income-tax Act, 1922, expressly exempts certain items of classes of income from its operation. Such income is not liable to be con-sidered for the purposes of the Act at all, unless some other provision ofthe Act brings it within its scope for some specific purpose. The Act con-tained from time to time various provisions which provided for exemption. There were the provisos to section 7 before it was amended in 1955. There are the provisos to section 8. Section 14 sets out a number of exemptions of general nature. Sections 15, 15A, 15B and 15C similarly provide for exemption. Although the language generally employed is that " the taxshall not be payable " in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits and gains referred to in sub-section (1)of section 4 computed in the manner laid down in this Act. . . . . " (1) [1949] 17 I. T. R. 180. It is contended that the amendment extended the scope of the definition of " total income " so that it covered not only the sums specifically referred to in section 16, but also those sums mentioned in other provisions of the Act in respect of which it was declared that no tax was payable. It appears to us that the contention is stated rather widely. It is not every sum declared by the Act to be exempt which is liable to be included in the total income. It is only those sums which the Act specifically requires to be so included. To our mind, the amendment of the definition of " tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee that it is entitled to the set-off claimed by it in the proceedings for the assessment year to which the broken period relates, then we shall extend to the assessee the benefit of setting off that loss twice over. In the first instances, the assessee is entitled to the benefit of setting off the loss, when the loss is considered in substitution of the income of the previous year for the preceding assessment year. In other words, the assessee will be entitled to set off the loss against the income under other heads in the proceedings for the assessment year 1948-49. The second instance is when the same loss is allowed to be set off against the profits under other heads in the proceedings for the assessment year to which the broken per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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