TaxTMI 
TaxTMI 
1950 (9) TMI 14
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.... and spices on commission. No. (2) does business in grain on commission. No. (3) used to do business in cloth and spices on commission, but it was discontinued with effect from Kartik Badi 6, corresponding to 17th October, 1935, i.e., within two months of the commencement of the previous year. The accounts of the assessee are made up in Bhadoun and the assessee's previous year commenced on 19th August, 1935, and ended on 21st August, 1936. The total receipts and expenses of this period of about two months, which I have verified on an examination of the books, have been as follows : Cr.Dr. Rs.A.Rs. A. Commission 50Payment to different people in common account238 Bardana508Postage140 Dalali100Deficit in interest account400 Loss810Miscellaneous establishment expenses after excluding Rs. 35 for charity 690 --- --- 146 8 1468 ---  ....
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.... detail, and refused to interfere with the assessment. Copies of the petition of appeal dated the 1st November, 1937, and the appellate order dated the 19th January 1938, marked Exhibits B and C are hereto annexed. 4. The assessee has now come up to me in reference (his application under Section 66(2) is marked Exhibit D) and has asked me to refer the following questions under Section 66(2) of the Income-tax Act, in case I am unable to allow relief under Section 33 of the Act : (1) " Where a joint Hindu family firm carries on business at two different places in the same name and does not continue the business at one shop for the whole accounting year whether in such cases profits and losses of both shops be adjusted under Section 24 in ascertaining the total assessable income of the assessee or the losses of one shop should be ignored. " (2) " Whether the business of the joint Hindu family which carries on its trade in three different shops be treated as one legal entity or their income can be assessed separately. " (3) " Where admittedly the losses incurred in Badridas Beharilal Halsey Road s....
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....f Cawnpore under the names of (1) Hulasilal Ramdayal, General ganj, Cawnpore, (2) Badridas Beharilal, Collector ganj, Cawnpore, (3) Badridas Beharilal, Halsey Road, Cawnpore. The first shop does business in cloth and spices on commission and so did the third shop, but the second one does business in grain on commission. The question whether all these businesses are single or separate does not fall for determination in the present case because it is common ground that if all these businesses have been carried on during the accounting year, the loss of one shop can under Section 24 of the Act be set off against the profits of the other two shops. The assessment year was 1937-38, but as the accounts of the assessee were made up from August to August. The accounting year in the present case was from the 19th of August 1935 to the 21st of August 1936. The Commissioner has found that the third shop, namely Badridas Beharilal, Halsey Road, Cawnpore, was closed on the 17th of October 1935, that is within two months of the commencement of the accounting year. The first two shops made a profit and according to the assessee the last shop suffered a loss. The contention of the assesse....
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.... The question that has been referred to us is : " Whether, in the circumstances of this case, the loss on account of interest and bad debts etc. debited to the books in respect of the discontinued business at shop No. 3 at Halsey Road, Cawnpore, can be set off against the profits made by the assessee at the other two shops ". We might once more state what the Commissioner has stated and say that the third shop was discontinued on the 17th of October 1935 about two months after the commencement of the accounting year and the accounts of the assessee were made up in Bhadon and so far as the accounting year in the present case was concerned, the accounts were made up on the 21st of August, 1936. Learned Counsel for the assessee argues that the third shop which sustained a loss was carried on for two months and business was done in any event, even according to the finding of the Assistant Commissioner, for ten days and showed a profit of Rs. 2-14 and therefore section 10 of the Act did come into play and the tax would have been payable by the assessee under the head ' business ' in respect of the profits or gains of this particular shop which functioned for ten days or for t....