Section 25(4) relief on succession extends to property income, cross-head set-off, and super-tax where no actual assessment existed.

Section 25(4) relief on succession was treated as extending to income from house property where that income formed part of the business assets and arose in the course of the business, because the heads of income under the 1922 Act are only computational categories. The article also states that business loss could be set off against property income under section 24(1) before claiming the remaining section 25(4) relief, since the provision does not prescribe a rigid order of adjustment. On super-tax, relief was held available because a provisional computation for another levy was not an actual assessment to super-tax within the proviso.

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Issues: (i) whether relief under section 25(4) of the Indian Income-tax Act, 1922, on succession was available in respect of income from house property; (ii) whether the business loss could first be set off against property income and thereafter relief under section 25(4) could be claimed in respect of the balance of other income; and (iii) whether relief under section 25(4) was available in respect of super-tax.

Issue (i): whether relief under section 25(4) of the Indian Income-tax Act, 1922, on succession was available in respect of income from house property.

Analysis: Section 25(4) grants relief where a business, profession or vocation, on which tax had at any time been charged under the Indian Income-tax Act, 1918, is succeeded by another person, and the provision is intended to prevent double taxation on the income of the relevant period. The heads of income under the 1922 Act are only methods of computation and do not exhaustively define the source of the income. Income from house property, when held as part of the business assets and earned in the course of the business activity, does not cease to be part of the business income for the purpose of this relief.

Conclusion: Relief under section 25(4) was available to the assessee in respect of income from house property, and this issue was decided in favour of the assessee.

Issue (ii): whether the business loss could first be set off against property income and thereafter relief under section 25(4) could be claimed in respect of the balance of other income.

Analysis: Section 24(1) permits set-off of loss under one head against income under another head in the same year and does not require any rigid sequence that business loss must be absorbed only against one particular class of income first. The scheme of section 24 distinguishes the immediate set-off under sub-section (1) from the carry-forward mechanism under sub-section (2), and there is no statutory bar to the adjustment claimed by the assessee.

Conclusion: The assessee was entitled to set off the business loss against property income and then claim the consequential relief, and this issue was decided in favour of the assessee.

Issue (iii): whether relief under section 25(4) of the Indian Income-tax Act, 1922, was available in respect of super-tax.

Analysis: The proviso to section 25(4) excludes super-tax except where the income, profits and gains of the business were assessed to super-tax for the first time in the specified years. A provisional computation made only to determine whether excess profits duty or super-tax was payable under section 19 of the Excess Profits Tax Act, 1919, does not amount to an actual assessment to super-tax. On the facts found, the assessee had not been assessed to super-tax earlier in the sense required by the proviso.

Conclusion: Relief under section 25(4) was available in respect of super-tax, and this issue was decided in favour of the assessee.

Final Conclusion: All three referred questions were answered in favour of the assessee, and the entitlement to relief under section 25(4), including the related set-off and super-tax claim, was upheld.

Ratio Decidendi: For the purpose of section 25(4), the relevant business income is not confined by the heads of computation under the Income-tax Act, a permissible set-off under section 24(1) may be made across heads in the same year, and a provisional computation for another levy is not an assessment to super-tax within the statutory proviso.

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