TaxTMI 
TaxTMI 
1965 (4) TMI 117
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.... 1956-57: "Whether the dividend income of Rs. 23,302 can be set off under section 24(2) against the business loss of Rs. 4,17,255 (Rs. 12,934 Plus Rs. 4,04,321) brought forward from the assessment year 1955-56?" The material facts as appearing from the case stated by the Tribunal are these. The relevant assessment years are 1955-56 and 1956-57, the corresponding account years being 7th November, 1953, to 26th October, 1954 and 27th October, 1954, to 14th November, 1955. The assessee is a Hindu undivided family deriving income from several sources falling under the following three heads: (i) Income from property (section 9); (ii) Profits and gains of business, profession or vocation (section 10); and (i....
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....s head and, therefore, the question of set-off under section 24(2) of the Act did not really arise. It did, however, arise in the assessment year 1956-57 because, though there was a profit of Rs. 3,56,553 under the business head, the loss of well over Rs. 4,00,000 which had been brought forward was larger than the profit. There was also the dividend income of Rs. 23,302. Therefore, it was really in that year that the question of set-off under section 24(2) of the Act arose. For each of the two assessment years, the Income-tax Officer and the Appellate Assistant Commissioner took the view that the profits and gains, if any, of any business, profession or vocation mentioned in section 24(2)(ii) meant only those profits and gains which were as....
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.... only against the profits and gains, if any, of any business in speculative transactions carried on by him in that year; (ii) Where the loss was sustained by him in any other business, profession or vocation, it shall be set off against the profits and gains, if any, of any business, profession or vocation carried on by him in that year: provided that the business, profession or vocation in which the loss was originally sustained continued to be carried on by him in that year; and (iii) if the loss in either case cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following year and so on, but no loss shall be so carried forward for more than eight years...." The precise questi....
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....stively delimit sources from which income arises. This is made clear in the judgment of this court in the United Commercial Bank Ltd.'s case [1957] 32 I.T.R. 688, 704 (S.C.) that business income is broken up under different heads only for the purpose of computation of the total income: by that break up the income does not cease to be the income of the business, the different heads of income being only the classification prescribed by the Indian Income-tax Act for computation of income." In United Commercial Bank Ltd. v. Commissioner of Income-tax [1957] 32 I.T.R. 688, 704 (S.C.), the question was whether, when the purchase and sale of securities formed part of the assessee's business, interest on such securities falling under sec....
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.... whether the holding of securities out of which interest was derived formed part of same business within section 24(2) or not. The appeal would, therefore, be allowed and the case remitted to the High Court for a fresh decision of the reference after getting from the Tribunal a fuller statement of facts about this part of the case, whether the securities in question were a part of the trading assets held by the assessee in the course of its business as a banker." In Cocanada Radhaswami Bank Ltd. v. Commissioner of Income-tax [1962] 46 I.T.R. 680, Satyanarayana Raju J. opined in a very brief judgment, that interest on securities held by a bank as part of its trading assets can be set off under section 24(2) against business losse....
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.... view that the exemption granted to profits and gains from "business, profession or vocation" was not restricted to profits and gains assessable under section 10 of the Act. Shah J., speaking for the court, further observed: "It has also to be noticed that prior to the insertion of sub-section (1A) of section 12 by section 9 of the Finance Act, 1955, with effect from April 1, 1955, income from dividends was chargeable not under section 12 but under section 10, if the shares from which such income was received were the stock-in-trade of the assessee. The result of the insertion of section 12(1A) is that in respect of business in shares dividends received from the shares were till March 31, 1955, regarded as profits and gains of busi....