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Issues: Whether the loss suffered by an assessee as a partner in non-resident firms could be set off against his business income in India under the business income provisions of the Indian Income-tax Act.
Analysis: The share income of a partner is assessable under the head of business when the partnership business is carried on by the assessee, even though in conjunction with others. The fact that a firm is treated as a distinct assessable unit does not prevent the partner's share of loss from being taken into account in computing the assessee's total business income. The provisions dealing with assessment of firms and partner shares did not displace the ordinary rule that business profits and losses are computed on the net result of the assessee's business operations. Accordingly, loss arising from partnership business could be adjusted against profits from the assessee's own business.
Conclusion: The question was answered in the affirmative and in favour of the assessee.
Final Conclusion: A partner's share of loss from partnership business, including foreign or non-resident firms, is part of business computation and may be set off against business income in arriving at total assessable income.
Ratio Decidendi: A partner's share of profit or loss from a partnership business is income under the head of business, and for computing the assessee's business income the net result of all such business operations must be taken into account.
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