Business-wise tax computation permits fair apportionment of common expenses where an assessee runs distinct businesses.

The Income-tax Act, 1922 requires profits and gains to be computed business-wise where an assessee carries on distinct businesses, and the expression "any business" in section 10 is not limited to a single business. Where expenses are not separately allocated between businesses, the Income-tax Officer may make a fair and reasonable apportionment to determine the true profit or loss of each business. On that basis, expenses could be apportioned between the money-lending and speculation businesses to arrive at the correct computation.

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Issues: Whether, where an assessee carries on more than one business and the expenditure is not separately allocated, the Income-tax Officer can make a fair apportionment of expenses under the Income-tax Act, 1922 for the purpose of computing the true profit or loss of each business.

Analysis: The relevant scheme of the Act requires profits and gains of business to be computed business-wise, and the word "any business" in section 10 is not confined to a single business. Where an assessee carries on distinct businesses, the expenses attributable to each business must be taken into account in determining the correct result of that business. If the assessee does not itself allocate the expenses on a separate basis, the Income-tax Officer is not barred by section 10(2)(xv) from making a fair and reasonable apportionment so as to ascertain the true loss or profit. The question is not whether expenses can be ignored, but whether the computation can be made correctly without separating them.

Conclusion: The Income-tax Officer was entitled to apportion the expenses between the money-lending and speculation businesses, and the question was answered in the affirmative, against the assessee.

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