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TMI Blog1954 (3) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had also business in a Part B State and in the business which he carried on in the Part B State there was a loss of ₹ 52,432. He also received dividends on shares in the Part B State in the sum of ₹ 66,045. Therefore the result was that as the assessee was a resident he had to show in his total income not only the income which he had received in the taxable territories but also the income which had accrued to him anywhere else, and his total income on a proper computation came to ₹ 1,32,592. In computing this total world income of ₹ 1,32,592 the loss which he had incurred in his business in the Part B State, viz., ₹ 52,432, was set off against the profits which he had made in the business in the taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss under one head enumerated in Section 6 to set off that loss against a profit made by him under a different head under Section 6. Section 24 cannot be construed in the light of the first proviso to that section." 7. Now, Mr. Kolah says that if we accept the principle underlying this decision, then the only result that must logically follow is that he is entitled to exemption with regard to the whole of the dividend income, viz., ₹ 66,045. Mr. Kolah has drawn our attention to the decisions of several other High Courts which have accepted the principle underlying this decision. We reaffirm the principle which we enunciated in that case, and that principle really comes to this, that if an assessee carries on a business in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income arising under each one of these heads. Section 14 deals with exemptions and that section lays down in respect of which income, profits or gains included in the total income of the assessee tax shall not be paid. Therefore, in the first instance the assessee has got to submit a return of his total income and he had then to claim exemption in respect of certain portions of the income included in his total income. In this case by a proper mode of computation his total world income is shown as ₹ 1,32,592. In computing his total world income the principle laid down in Commissioner of Income-tax, Bombay v. Murlidhar Mathurawalla Mahajan Association [[1918] 16 I.T.R. 146.] has been strictly applied because under the head business t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is difficult to understand how that answer can be the proper or the legal answer. In support of the suggested answer what Mr. Kolah says is that under Section 14(2)(c) exemption is granted because of the place of accrual and the exemption is taken away only where any particular income, profits or gains under any of the heads is brought into or received in the taxable territories. Mr. Kolah's contention is that any income, profits or gains under Section 14(2)(c) means income, profits or gains only under one head and it is not permissible to apply Section 24(1) and set off the loss under one head against the profits of another and therefore it is urged that only the dividend income of ₹ 66,045 accruing or arising in the Part B St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submission has been merged in the profits made in the taxable territories. But for the purposes of Section 14(2)(c) all that we have got to look at is the income, profits or gains accruing to the assessee in the Part B State; and the only two relevant figures for the purposes of deciding what the income, profits or gains accruing or arising to the assessee in the Part B State are the loss of ₹ 52,432 in business and the gain under the head dividends of ₹ 66,045. In our opinion the expression "any income, profits or gains" used in Section 14(2)(c) means the resultant income, profits or gains after taking into account all the heads. In putting this construction we are not importing the principle underlying Section 24( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use although he claims ₹ 66,045 as a legitimate exemption under Section 14(2)(c) if this amount were to be brought into the taxable territories the obvious answer that the assessee would give is that the remittance liable to tax is ₹ 13,865 and not any sum over and above that sum of ₹ 13,865. 10. Mr. Kolah then contends that if the view we take is the correct view, serious difficulties would arise with regard to the computation of tax. Mr. Kolah says that there are different rates of tax with regard to income from business and income from dividends, and if he is to be given exemption only in the sum of ₹ 13,865 whereas his dividend income in the Indian State had been ₹ 66,045 he would get exemption at a lower ..... X X X X Extracts X X X X X X X X Extracts X X X X
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