1923 (10) TMI 2

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..... of his own and from other property, has made losses in other businesses of his own, and also has incurred losses in two distinct businesses in which he is a partner and which businesses are not registered. 3. The question for decision is a difficult one, the difficulty arising from the wording of the Income Tax Act. If our decision is not in accordance with the real intention of the legislature, it is for the legislature to make that intention clear hereafter. The relevant sections for consideration are 6, 10 and 24, and the difficulty is to ascertain the proper interpretation of the two latter. Section 6 is merely a division into heads of the different sources of income, one being ' business ' concluding with a genera .....

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..... m to be his view that, if the partnerships had been registered, such set off would be allowable also in respect of the losses of the partnership businesses. 5. The Crown's argument is based on the words of Section 10 which refers to the profits of any business and would have us construe 'any' as 'each and every.' Counsel points to the English Income Tax Act which under Schedule D makes chargeable to Income Tax the profits and gains from any trade, and then by special rule, namely, Rule 15 of the rules applicable to cases I and II, (case I being that in respect of trade), provides that the losses of one business can be set off against the profits of another. This re-enacts Section 101 of the Income Tax Act of .....

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..... one business against losses in another. And for this purpose, I can find no distinction between what an assessee earns alone and what he earns in partnership. It is argued by the Commissioner that a partnership is, for Income Tax purposes, an entity, but it is not an entity known to the law it is not a separate entity like a company limited by shares, its name is merely a convenient method of describing its partners, each of whom is jointly and severally liable for its debts, and for Income Tax purposes, it is a convenient body to assess, as the partners carry on the trade together and keep books in which the partnership transactions are entered and earn together profits or make losses. It is to be observed that for this purpose no distinct .....

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