Carry-forward of business losses cannot depend on prior departmental determination unless the statute expressly requires it.

A statutory right to carry forward business losses under section 24(2) could not be denied on the ground that the loss had not first been ascertained and determined by the department, because the Act did not impose that requirement in the relevant years. The later insertion of section 22(2A) in 1953 did not govern the assessment years in question and could not be used to defeat the carry-forward claim. Where an assessee had no obligation to file a return, insisting on prior departmental determination would frustrate the object of the provision. The losses were therefore to be determined and carried forward for set-off against subsequent profits, and the earlier contrary view was overruled.

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Issues: Whether an assessee could carry forward business losses under section 24(2) without prior ascertainment and determination of the loss by the department, and whether the later insertion of section 22(2A) affected the position for the years in question.

Analysis: Section 24(2) of the Indian Income-tax Act entitled an assessee to carry forward unadjusted losses for six years, subject only to the condition in section 24(1) relating to multiple heads of income. The requirement that the loss must first have been ascertained and determined by the department before the claim for carry-forward could be made was not found in the statutory language. The later insertion of section 22(2A) in 1953 did not apply to the relevant assessment years and could not be used to deny the statutory right to carry forward losses. To insist on prior departmental determination in years where the assessee had no obligation to file a return would defeat the object of the provision.

Conclusion: The assessee was entitled to have the losses for the relevant assessment years determined and carried forward for set-off against subsequent profits. The earlier view requiring prior ascertainment and determination was overruled.

Ratio Decidendi: A statutory right to carry forward losses cannot be made contingent on prior departmental ascertainment and determination unless the Act expressly imposes that requirement.

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