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TMI Blog1965 (4) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 24(2) against the business loss of ₹ 4,17,255 (Rs. 12,934 Plus ₹ 4,04,321) brought forward from the assessment year 1955-56? The material facts as appearing from the case stated by the Tribunal are these. The relevant assessment years are 1955-56 and 1956-57, the corresponding account years being 7th November, 1953, to 26th October, 1954 and 27th October, 1954, to 14th November, 1955. The assessee is a Hindu undivided family deriving income from several sources falling under the following three heads: (i) Income from property (section 9); (ii) Profits and gains of business, profession or vocation (section 10); and (iii) Income under the residuary head which now includes dividend income (section 12). It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeded on the footing that whatever loss remained to be set off for any previous statement year was on account of loss in the business of shares. So considered, the position at the end of the assessment year 1954-55 was that the assessee was entitled to carry forward a loss of ₹ 4,04,321 to the following assessment year 1955-56. In that year there was a loss under the business head and, therefore, the question of set-off under section 24(2) of the Act did not really arise. It did, however, arise in the assessment year 1956-57 because, though there was a profit of ₹ 3,56,553 under the business head, the loss of well over ₹ 4,00,000 which had been brought forward was larger than the profit. There was also the dividend income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40, in any business, profession or vocation, and the loss cannot be wholly set off under sub- section (1), so much of the loss as is not so set off or the whole loss where the assessee had no other head of income shall be carried forward to the following year, and (i) Where the loss was sustained by him in a business consisting of speculative transactions, it shall be set off only against the profits and gains, if any, of any business in speculative transactions carried on by him in that year; (ii) Where the loss was sustained by him in any other business, profession or vocation, it shall be set off against the profits and gains, if any, of any business, profession or vocation carried on by him in that year: provided that the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other provisions of the Act. So, the Supreme Court observed in Commissioner of Income-tax v. Chugandas Co. [1965] 55 I.T.R. 17, 24 as follows: The heads described in section 6 and further elaborated for the purpose of computation of income in sections 7 to 10 and 12, 12A, 12AA and 12B are intended merely to indicate the classes of income: the heads do not exhaustively delimit sources from which income arises. This is made clear in the judgment of this court in the United Commercial Bank Ltd.'s case [1957] 32 I.T.R. 688, 704 (S.C.) that business income is broken up under different heads only for the purpose of computation of the total income: by that break up the income does not cease to be the income of the business, the differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties. In Punjab Co-operative Bank's case [1940] 8 I.T.R. 635 (P.C.), a finding had been given that the purchase and sale of securities was as much the assessee's business as receiving deposits from clients and withdrawals by them. In the case before us no such finding has been given and in the absence of such finding no opinion can be given as to whether the holding of securities out of which interest was derived formed part of same business within section 24(2) or not. The appeal would, therefore, be allowed and the case remitted to the High Court for a fresh decision of the reference after getting from the Tribunal a fuller statement of facts about this part of the case, whether the securities in question were a part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as part of the income profits and gains of that business within the meaning of section 25(3) and the assessee was entitled to exemption from tax in respect thereof under that sub-section. This was affirmed in Commissioner of Income-tax v. Chugandas Co. [1965] 55 I.T.R. 17, 23, 24 (S.C.). The Supreme Court considered the question at some length and took the view that the exemption granted to profits and gains from business, profession or vocation was not restricted to profits and gains assessable under section 10 of the Act. Shah J., speaking for the court, further observed: It has also to be noticed that prior to the insertion of sub-section (1A) of section 12 by section 9 of the Finance Act, 1955, with effect from April 1, 1955, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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