Business loss set-off within a single assessee's aggregated income is governed by section 10, not section 24(1).

An assessee carrying on multiple businesses may set off a loss from one business against profits of another under section 10 of the Income-tax Act, 1922, because tax is charged on the aggregate business profits and losses of the assessee. Section 24(1) does not control such intra-assessee adjustment. Applying the Supreme Court ruling in Muthuraman Chettiar, the Punjab and Haryana High Court treated the facts as identical and rejected the department's attempt to distinguish the loss on the ground that it arose in a firm, since the claim was made by the Hindu undivided family in its own assessment. The set-off was therefore allowed.

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Issues: Whether the assessee-family was entitled to set off its share of loss in the firm against its other business income under section 10 of the Income-tax Act, 1922, or whether section 24(1) barred such set-off.

Analysis: The question was held to be covered by the Supreme Court decision in Muthuraman Chettiar, which laid down that where an assessee carries on several businesses, the tax is chargeable on the aggregate of the profits of all the businesses and losses in one business may be set off against profits in another under section 10, not under section 24(1). The Court found the facts identical and rejected the department's attempt to distinguish the case on the basis that the loss related to a firm, since the assessee before the Court was the Hindu undivided family claiming the loss in its own assessment. The authorities relied on by the department were held inapplicable.

Conclusion: The assessee-family was entitled to claim the set-off under section 10, and section 24(1) did not apply.

Ratio Decidendi: Where an assessee carries on multiple businesses, business losses are adjusted against the aggregate business income under section 10 of the Income-tax Act, 1922, and section 24(1) does not govern such intra-assessee set-off.

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