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Issues: Whether a loss from a business carried on in an Indian State could be set off against profits from another business carried on in British India, and whether the proviso to the set-off provision restricted such adjustment within the same head of income.
Analysis: Business income was treated as a single head under the Act, and all businesses carried on by an assessee fell within Section 10. The right of set-off under Section 24 arose only when a loss under one head was sought to be adjusted against income under another head. The proviso to Section 24(1) could not be used to cut down the plain scope of the main enactment. Since the loss and the profit were both within the business head, the assessee was entitled to aggregate the results of the two businesses and set off the loss against the profit.
Conclusion: The loss from the Indore business was allowable to be set off against the Bombay business profits, and the answer to the reference was in favour of the assessee.
Final Conclusion: The decision confirms that business profits and losses from separate businesses are to be computed together within the same head, and the proviso to the set-off provision does not restrict that intra-head adjustment.
Ratio Decidendi: Where multiple businesses fall under the same statutory head of income, losses from one business may be set off against profits from another business within that head, and a proviso cannot be used to narrow the clear scope of the main enacting provision.
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