1952 (3) TMI 53

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....os. could be set off against the loss of Rs. 52,569 sustained by the respondent Hindu undivided family in speculation business for the purpose of determining the loss to be carried forward under Section 24 (2)". The assessee is the karta of a Hindu undivided family. The karta was also a partner in an unregistered firm known as Messrs. Dharmashi Brothers. During the assessment year, the assessee received as his share of the profit of the unregistered firm a sum of Rs. 22,440 on which tax was collected from the unregistered firm. His account of the total income and the loss as compiled by the Income-tax Officer is as follows:-   Amount Amount.             Rs. A. P Rs....

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....Appellate Tribunal was right or whether the view of the department should prevail. The set-off allowed under Section 24(1) of the Act is in respect of. the loss sustained under one head against the profits or gains under one or more heads earned during the accounting year. In the case of unregistered firms, under Section 14, if tax has already been paid by a partner of such firmlin respect of any portion of his share in the profits and gains computed in the manner laid down in clause(b) of sub-section(1) to Section 16, it shall not be again liable to be assessed to tax again, the reason being, as the income had already suffered tax it could not be subjected to double taxation. But under Section 16 the amount so exempted from further taxa....

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....h income the set-off is allowed. It is not against the total income but only against the income and profits or gains under any other head in that year ; that is, in respect of which tax could be collected. The object of the set-off is to reduce the liability of the assessee in respect of the amount of tax payable by him by taking into consideration not only the profits but also the losses : as otherwise it will be inequitable to call upon the assessee to pay the tax on profits earned by him under one head, leaving alone the losses sustained by him under the other heads, even though the losses might exceed the profits or may be equal to the profits or may be lower than the profits. There is the provision introduced in section 24 by the Amend....