LAXMICHAND JAIPORIA SPINNING AND WEAVING MILLS Vs. IN RE

JUDGEMENT

(1.) THE point at issue in this case is stated in the question which has been referred to this Court by the Income-tax Tribunal, Bombay Bench, by their order dated 31st August, 1949, which is "whether, in the circumstances of the case and having regard to the proviso (b) to Section 10(2)(vii), the part of the depreciation allowance (to which effect could not be given), viz., Rs. 12,505 (Rs. 23,990 minus Rs. 8,228, and minus Rs. 3,257), could be treated as loss of profits under the head business, and apportioned amongst the partners under proviso 2 to Section 24(1) of the Income-tax Act."

(2.) THE case as stated by the Income-tax Tribunal is as follows :-

(3.) THE question is whether this sum of Rs. 12,505 can be taken into account by the partners of the registered firm in their individual assessment. THE submission of the Commissioner was that this was not a loss which could be so taken into consideration for the purpose of Section 24 of the Income-tax Act. Reliance was placed on Section 6 of the Income-tax Act. Under this section the heads of income chargeable to income-tax ar : (i) Salaries. (ii) Interest on securities. (iii) Income from property. (iv) Profits and gains of business, profession or vocation. (v) Income from other sources. (vi) Capital gains.