Law: Income Tax Act, 1922

Section: 24,24(2)

Income tax Act (XI of 1922)---S. 24(2)-Setting-off loss-Words "any other business" read with words "such business" occurring, in cl. (ii) of S. 24(2)-Mean every business other than that consisting of speculative transactions-Setting-­off loss from non-speculative business, profession or vocation-Held, can be claimed against income and gains derived from any non-specula­tive business, profession or vocation not necessarily being same business, profession or vocation from which loss had arisen. (1969) 20 Taxation 112; Produce Exchange Corporation Ltd. v. Commis­sioner of Income-tax (1971) 24 Taxation 1 and Messrs Sainrapt & Et. Brice, Karachi v. The Commissioner of Income-lax (West), Karachi P L D 1979 Kar. 591 ref. JUDGMENT MUHAMMAD HABIBULLAH, J.-This is a reference under section. 66(l) of the Income-tax Act, 1922 by the Income-tax Appellate Tribunal (Pakistan), Lahore, made at the instance of the applicant Raees Ghazi Muhammad Khan, whereby the following question of law which is said to arise from the Tribunal's consolidated order dated 23-9-1969, made in I. T. As. Nos. 1918 and 1919 of 1966-67, has been referred for opinion of this Court: "Whether on the facts and in the circumstances of the case the Tribu­nal was right in upholding the decision of the officers below wherein it was held that share of losses from Messrs Faiz Jillani Co., Karachi incurred and allocated in the previous years, could not be given set-off against the share profit of the firm Messrs Shabbir Cotton Factory, Walhar received daring the assessment year?" 2. The facts of this case in brief are that the applicant is a partner of two registered firms, namely Messrs Shabbir Cotton Factory, Wahlar and Messrs Faiz Jillani Co. Karachi, both of which are engaged in doing cotton ginning business. Both these `concerns suffered losses for a number of years prior to the two assessment years under consideration, namely, 1964-65 and 1965-66, during which years they made profits. The assessee claimed that his share of losses determined in the previous years in Messrs Faiz Jillani Co. be brought forward and set-off against the share of profits for the assessment year 1964-65 in question for both…

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