1970 (11) TMI 37

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..... following question of law has been referred for our opinion: " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that section 24(1) of the Income-tax Act, 1922, did not apply to the assessee's case and that the assessee-family was entitled to set off its share of loss in the unregistered firm against its other business income under section 10 of the said Act?" The assessee is a Hindu undivided family. It derives income from shares held in certain firms, dividend income, etc. The assessee family had 9/16th share in the firm, Messrs. R. S. Jodhamal Kuthiala, New Delhi. There is a dispute as to whether this firm was an unregistered or a registered firm, i.e., Messrs. R. S. Jodhamal Kuthiala, .....

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..... te Tribunal against the order of the Appellate Assistant Commissioner. It was contended before the Tribunal that section 24 is the provision which specifically applies to the question of set-off of loss in computing the aggregate income. According to the department, the assessee was an unregistered firm and loss suffered by it could only be set off against its income, profits and gains and it could not be set-off against income, profits and gains of any partners of the firm. It was further contended that since the loss in question pertained to an unregistered firm, such loss could only be set off against the income of the very unregistered firm and not against the assessee's income. The Appellate Tribunal did not accept the contentions of t .....

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..... uffered in a totally different identity. In fact, it was clearly observed by the Supreme Court in P. M. Muthuraman Chettiar's case, while dealing with a similar argument that the case stood covered by section 24, as follows: "Though the profits of each distinct business may have to be computed separately, the tax is chargeable under section 10, not on the separate income of every distinct business, but on the aggregate of the profits of all the businesses carried on by the assessee. Therefore, where the assessee carries on several businesses, he is entitled under section 10, and not under section 24(1), to set off losses in one business against profits in another. If section 24(1) has no application the second proviso thereto can also have .....

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