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Issues: Whether losses suffered by an assessee in a partnership or foreign business could be set off against profits of another business under the Indian Income-tax Act, 1922, and whether such relief fell under section 10 rather than section 24(1).
Analysis: The assessee carried on more than one business, and the loss arose in one business while profits arose in another. The governing principle is that section 10 charges tax on the aggregate profits of all businesses carried on by the assessee, and it does not split up the business head by individual ventures so as to deny set-off between businesses. The distinction urged between a partner's share in a firm and the assessee's own business was rejected. Section 24(1), which concerns set-off under different heads, did not govern the case, and its second proviso was inapplicable.
Conclusion: The losses were allowable to be set off against the assessee's business profits, and the reference was answered in favour of the assessee.
Final Conclusion: The decision affirms that where an assessee carries on several businesses, losses from one business may be adjusted against profits from another under the business head, and the appeals fail.
Ratio Decidendi: Losses of one business carried on by the assessee are set off against profits of another business under section 10 of the Indian Income-tax Act, 1922, and section 24(1) has no application where the adjustment is within the business head.
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