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TMI Blog1975 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... -- These losses could, not be absorbed by or set off against any other income. Therefore, it was brought forward for consideration in the assessment year 1958-59. We are concerned in the present reference with the assessment years 1958-59, 1959-60 and 1960-61. The assessee along with his wife was partner in a firm called A.L.S. Productions. In the said firm, he had a half share. The other half share belonged to his wife. For the assessment year 1958-59, the share income from the said partnership business allocated to him comes to Rs. 2,16,299 and a similar amount was allocated to his wife. That amount was liable to be taxed in his hands under the provisions of section 16(3)(a)(i). In making the assessment for 1958-59, the Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied the disallowance of the assessee's claim on a reference to section 24(2)(ii) of the Indian Income-tax Act, 1922, which applied to the relevant years. The Appellate Assistant Commissioner, on appeal, took the view that the wife's share income from the firm, assessed in the hands of the husband under section 16(3)(a)(i) of the Act, became part and parcel of his own total income for all purposes including for the purpose of set-off in computing the aggregate income contemplated by section 24(2)(ii) and the assessee was, therefore, entitled under section 24(2)(ii) of the Act to set off the unabsorbed loss of the proprietary business against his wife's share income from the partnership. The loss having thus been allowed by the Appellate Assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for the assessment of the income of the wife in the hands of the husband has not converted the income of the wife into the income of the husband. In this submission, section 24(2)(ii) would permit allowance only on a loss sustained by him against the income earned by him. The assessee is not either represented by any counsel nor was he present before US. Section 16(3)(a), in so far as it is relevant, runs as follows : " In computing the total income of any individual for the purpose of assessment, there shall be included-- (a) so much of the income of a wife .................. of such individual as arises directly or indirectly-- (i) from the membership of the wife in a firm of which her husband is a partner. " The rest o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her business, profession or vocation and that, if so, it could be set off against the income from any business, profession or vocation carried on by him in that year. The Tribunal has taken the view that notwithstanding that the wife is also a partner in the firm, the business carried on by the firm could be treated as the business carried on by the assessee in that year. Though for certain purposes, when the business carried on by the firm is treated as the business carried on by the partner, still for applying section 24(1) the statute requires that the income against which the set-off is claimed belongs to the assessee. This requirement is not set aside in section 24(2). In the context of section 24(2)(ii) of the Act, it is difficult to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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