TRICUMLAL GIRDHARLAL Vs. COMMISSIONER OF INCOME TAX BOMBAY NORTH
LAWS(BOM)-1954-3-16
HIGH COURT OF BOMBAY
Decided on March 12,1954

TRICUMLAL GIRDHARLAL Appellant
VERSUS
COMMISSIONER OF INCOME-TAX, BOMBAY NORTH Respondents


Referred Judgements :-

COMMISSIONER OF INCOME-TAX [REFERRED TO]


JUDGEMENT

Chagla, C.J. - (1.)WE are concerned with the assessment year 1945-46, the corresponding accounting year being Samvat Year 2000, and in the return which the assessee made of his income, he showed first the income which he had received in British India and that income was Rs. 71,620 for business, Rs. 88 for interest on securities, Rs. 16,092 for property and Rs. 28,619 for dividends and Rs. 2,308 from other sources. The total of this income was Rs. 1,18,727.
(2.)NOW, the 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 Rs. 52,432. He also received dividends on shares in the Part B State in the sum of Rs. 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 Rs. 1,32,592. In computing this total world income of Rs. 1,32,592 the loss which he had incurred in his business in the Part B State, viz., Rs. 52,432, was set off against the profits which he had made in the business in the taxable territories. Therefore as far as the head of the business was concerned in the total world income what was shown was a profit of Rs. 19,188.
Now, the dispute as to the assessment of the assessee briefly is this. The contention of the department is that under Section 14(2)(c) the exemption to which the assessee is entitled is only Rs. 13,865 being arrived at by computing the total income of the assessee in the Part B State by deducting the loss of Rs. 52,432 from the dividend income of Rs. 66,045. As against that the contention of the assessee is that he is entitled to exemption with regard to the whole of the dividend income, viz., Rs. 66,045.

Now, in the first place let us try and understand as sympathetically as we can the case put forward before us by the assessee. Strong reliance is placed on our decision in Commissioner of Income-tax, Bombay City v. Murlidhar Mathurawalla Mahajan Association [[1948] 16 I.T.R. 146.].

(3.)IN that case we laid down that :
"Different business do not constitute different heads under the INcome-tax Act. All business wherever carried on constitute one head which falls under Section 10 of the Act and in order to determine what are the profits and gains of a business under Section 10 an assessee is entitled to show all his profits and set off against those profits losses incurred by him in the same head.
"
We further held that :-

Section 24 only deals with the right of an assessee who has made a 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.



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