1965 (3) TMI 91

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....e of loss determined and apportioned to him in those years amounted to Rs. 99,815 and Rs. 98,152, respectively. As and from 1st August, 1952, the assessee retired from the partnership business and the partnership business as a running concern was taken over by his brother, Jawaharlal, as his sole proprietary business under the same trade name and style "Jeramdas Naumal". During the next two assessment years, i.e., 1954-55 and 1955-56, the assessee carried on no business at all of any kind whatsoever, and accordingly there was no computation of his income under section 10 of the Act for the two assessment years 1954-55 and 1955-56. In the previous year relevant to the assessment year 1956- 57, i.e., in the year ended on 31st March, 1956, the assessee entered into a joint venture with his brother, Jawaharlal, in cotton and jute piece-goods on certain terms and conditions mentioned in a letter dated 1st November, 1954, which is annexure "A" to the statement of the case. In this joint venture, the assessee had 5 annas share in the profits and his brother had 11 annas share. The assessee's share of profits in the joint venture amounted to Rs. 1,69,342. In the books of account of "Je....

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.... partner of M/s. Jeramdas Naumal." On an application by the assessee, the Tribunal has stated the case referring to us the following question of law: "Notwithstanding the fact that the assessee retired from the firm of Jeramdas Naumal on August 1, 1952, and did not carry on that business during the previous year for assessment year 1956-57, whether the assessee's share of loss therefrom determined in assessment years 1952-53 and 1953-54 is available to be set off as a deduction under section 24(2) in the assessment of that year?" Mr. Kolah, learned counsel for the assessee, contends that the income-tax authorities as well as the Tribunal were in error in holding that in order to entitle the assessee to claim a set-off, in respect of the loss suffered by him in business, the business must be continued throughout without a break. The assessee was doing business in money-lending, cotton and piece-goods and speculation in the assessment years 1952-53 and 1953-54. In this business, he had suffered a loss. It may be that in 1954-55 and 1955-56 he did not carry on that business; but in the assessment year 1956-57, he carried on business in cotton and piece-goods. He thu....

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.... shades of meaning of both these words, the main idea conveyed is continuation of a thing without a break. Even the word "resume" conveys an idea of continuing or taking up a matter after an interruption but not after having given it up. The idea of starting a thing after having given it up is more aptly conveyed by the word "restarting" than resuming. Assuming that the word "resume" means "taking up a thing after having given it up" it will have to be seen whether the clause: "provided that the business, profession or vocation in which the loss was originally sustained continued to be carried on by him in that year", is capable of bearing a construction so as to include restarting of a business, in which loss was suffered, after its discontinuance. In our opinion, having regard to the scheme underlying the relevant provisions of the section, it is not possible to put such a construction on the said clause. Section 24 relates to set-off of loss in computation of aggregate income, and the said section, so far as is relevant for the purposes of this case, reads: "24. (1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in se....

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....at in respect of loss of profits and gains suffered by the assessee in his business, profession or vocation, if unabsorbed, in setting it off against other heads either on account of there being no other head of income or the income being less than the loss, it would be carried forward to the "following year." Clauses (i) to (iii) of sub-section (2) relate to the manner in which the said carried forward loss is to be set off in the subsequent following years. Clause (i) relates to the loss suffered in speculative transactions, and it provides that the carried forward losses in speculative business could be set off only against the profits of speculative business and not against other profits. Clause (ii) provides that the carried forward loss sustained by the assessee in any other business, profession or vocation could be set off against the profits and gains of any business, profession or vocation carried on by the assessee. It is clear that the carried forward loss of business, profession or vocation is not available for being set off against any other head of income except the profits and gains of business, profession or vocation, and this concession is available subject to the ....