Law: Income Tax Act, 1922

Section: 24,24(2)(ii)

[Indian Income Tax Act, 1922 (XI of 1922)].....Section 24 (2) (ii) -Loss-Carry forward and set off- Assessee partner in two firms doing business in bidi leaves-One partnership firm dissolved in preceding year-Share of unasorbed loss in the dissolved firm--Whether can be carried forward and set of against profits in continuing firm in subsequent year--Held yes-Word "Business", meaning of; Case affirmed:- Commissioner of Income Tax v. A. Dharma Reddy (1965) 58 I TR 356. Cases referred to: Dwarkadas Leeladhar v. Commissioner of Income Tax (1963) 47 I TR 619 ; Narain Singh (S.) v. Commissioner of Income Tax (1967) 66 I TR 341 ; Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax (1954) 26 I T R 765 (S C) and Sitaram Motiram Jain v. Commissioner Of Income Tax (1961) 43 I TR 405. JUDGMENT [The Judgment of the Court was delivered by GROVER, J.].-This is an appeal by certificate from a judgment of' the High Court of Andhra Pradesh answering the following question referred to it by the Tribunal arising out of the assessment of the assessee for the assessment year 1956-57 in the affirmative and in his favour: "Whether the assessee is entitled under the provisions of section 24 (2) of the Act to set of his share of unabsorbed loss amounting to Rs. 24,532 from the dissolved firm to M/s. A. Dharma Reddy, Morthad, brought forward from the assessment year 1955-56 against his other business income for the assessment year 1956-57?" The assessee is an individual whose only sources of income were his shares in several partnerships concerns.-Apart from the firms which carried on other businesses there were two firms which carried on the business in bidi leaves. The first was styled as M/s. A. Dharma Reddy, Morthad. The second firm was called A. Dharma Reddy & Co., Ditch-pally. The first partnership was dissolved on March 31, 1955, but the second one continued during the assessment year 1956-57. During the assessment year 1955-56 the assessee sustained a loss of Rs. 30,255 in the first firm. As he was carrying on several other businesses, after the necessary set-oh", the total loss sustained by him for that year came to Rs. 24,532. During the assessment year…

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