COMMISSIONER OF INCOME TAX MADHYA PRADESH NAGPUR Vs. KHUSHAL CHAND DAGA

JUDGEMENT

(1.) THESE appeals, by special leave, have been filed by the Commissioner of Income-tax, Madhya Pradesh, against the assessee, an individual, by name Seth Khushal Chand Daga. The assessee was a partner in a firm, Messrs. R. B. Bansilal Abirchand of Nagpur. In the year of account ending Diwali, 1941, he received his share of assets and property form this firm, and started business of his own. In the same year, his source of income were speculation, allowance from Government as treasurer, house property, and dividends. The assessee had received some profits from his share in an unregistered firm against which were set off his losses in his individual business, and the Income-tax Officer, who made the assessment, determined the loss to be carried forward, at Rs. 53,840.00. The assessee appealed against the assessment but did not question the loss which had been determined.

(2.) FOR the year 1942-43, the assessee claimed to reopen the question of the loss to be carried forward, stating that it was Rs. 2,11,760.00. This contention was not accepted by the Department, and on appeal, by the Tribunal. The contention was, however, raised again by him in the assessments for the years 1948-49 and 1949-50. In these years, he had profits from his shares in the unregistered firm, Rs. 1,82,773.00 and Rs. 1,39,922. - respectively, against which were set off his losses in his individual business, Rs. 1,18,913.00 and Rs. 60,589.00 respectively. The contention of the assessee was that the profits which he had derived from the unregistered firm could not be set off against the loss in his individual business as the profits of the unregistered firm had borne tax not in his hands but in those of the firm. This contention was rejected by the Department; but on appeal to the Tribunal, it was accepted. On the Tribunal being moved to make a reference, it referred four questions. Two of those questions dealt with matters also arising out of these assessments, but they have not been mentioned by us in this judgment. The two questions pertaining to these appeals were :

(3.) THE appeals fail, and are dismissed with costs. One hearing fee.