Law: Income Tax Act, 1922

Section: 24(2)

Income tax Act (XI of 1922)----S. 24(2) Set off Societies and shares held by assessee as its trading assets Income from such shares and societies Held, forms part of income of assess Loss sustained by assessee in banking business in previous assessment year Can be set off against such income. Commissioner of Income tax, Andhra Pradesh v. Cocanada Radhaswami Bank Ltd. (1965) 57 I T R 306; Rais Pir Ahmad Khan v. Commissioner of Income tax Lahore Zone, Lahore (1975) 32 Tax. 22; Messrs Sainrapt and Et. Brice, Karachi v. The Commissioner of Income tax (West), Karachi P L D 1979 Kar. 591 ref: Western States Trading Company Ltd. v. Commissioner of Income lax Central, Calcutta (1971) 80 I T R 21 rel. JUDGMENT NAIMUDDIN, J. By this application under section 66(1) of the Income tax Act, 1922, as amended by the Finance Act, 1971, the Commissioner of Income tax (Central), Karachi has directly referred to this Court the following question of law and arising out of the order dated 23 2 1971, passed by the Income tax Appellate Tribunal, Karachi Bench, Karachi. "Whether on the facts and in the circumstances of the case the learned Income tax Appellate Tribunal was justified in holding that loss sustained by the assessee in the banking business in the assessment year 1962 63 should be set off against income from interest on securities and dividends for the assessment year 1963 64 in view of subsection (2) of section 24 of the Income tax Act." The relevant facts giving rise to this question as stated in the application, are that the assessee/respondent is a banking company which enjoys the income from the business, interest on securities, dividends and properties. The original assessment for the year 1963 64 was completed on 31 10 1967, at an income of Rs. 3,99,165 which was rectified on 5 4 1969, under section 35 of the Income tax Act. The rectification was necessitated because in sequel to an Appellate Order for the year 1962 63 loss was determined which was to be given effect to. The Income tax Officer in his order dated 5 4 1969, allowed the set off of losses against business income of the respondent only and not against income of the assessee from other sources like…

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