1952 (3) TMI 53

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..... ndent Hindu undivided family in speculation business for the purpose of determining the loss to be carried forward under Section 24 (2) . The assessee is the karta of a Hindu undivided family. The karta was also a partner in an unregistered firm known as Messrs. Dharmashi Brothers. During the assessment year, the assessee received as his share of the profit of the unregistered firm a sum of ₹ 22,440 on which tax was collected from the unregistered firm. His account of the total income and the loss as compiled by the Income-tax Officer is as follows:- Amount Amount. Rs. .....

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..... of ₹ 52,569 in speculation. This loss was set off by the Income-tax Officer-which was affirmed by the Appellate Assistant Commissioner-against the profits not only of the joint family but also against the taxed share income of the karta from Messrs. Dharmashi Bros. which was a sum of ₹ 22,440. The balance of ₹ 26,927 was allowed to be carried forward under Section 24 (2) of the Act. The Appellate Tribunal reversed the decision of the revenue department and held that the loss could not be set off against the taxed share income from the unregistered firm received by the assessee during the year. At the instance of the Income-tax Commissioner this reference was made to this Court. The question is whether the view taken by the .....

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..... me is ₹ 3,000, in order to arrive at the tax payable the total amount of the income-tax should be 7/10ths. It is only for this purpose and for this purpose alone the exempted portion of the income of the assessee enters into consideration in the process of assessing the income of the assessee for the purpose of tax under the Act. The language of Section 24 (1) when it speaks of set off against his income, profits or gains can only apply to income which has not already suffered tax but income in respect of which tax could be levied and collected. It is against such an income, profits or gains that set-off is allowed. The words used are not total income but only income and that is important to bear in mind in order to find out aga .....

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