Law:

Section:

Income-tax Act (XI of 1922)----- Ss. 24(1), 10 & 6-Loss-Set-off-Whether assessee can be allowed to set off his share of loss computed in unregistered firm as a partner as against his share of income from a registered firm under the head "business for same charge year".The second proviso to section 24 of Income-tax Act, 1922 is not a substantive provision but operates as a proviso to the main enacting provisions of section 24(1). Section 24(1) is attracted to the case of set off of loss under one head against the income of the assessee under another head under section 6. It is to this general rule that the second proviso provides an exception that in the case of an unregistered firm any loss of that firm under one head must be set off against its income profits and gains under another head and not against the income, profits and gains of any of its partners. But in the case of an individual assessee if a loss is incurred in respect of any source of income, it must he set--off against profits from the same source before the income from that source can be arrived at. Such set-off may more appropriately be called `deduction'. It is allowed on ordinary commercial principles of computing profits. If after allowing the set-off as stated, the net result is a loss that loss may be set-off against profits from another source wader the same head, even apart from section 24(1). This is allowed because income under each head is computed by lumping the profits from various sources which fall under the same head. This is done by having recourse to section 10. Sec­tion 4(1) will be attracted only when loss under one head of income is intended to be set-off against profits under another head. Where the loss and profits involved in the set-off were not under different heads but under the same head, namely, business, section 24(1) was not attracted. Second proviso the application of which went alongwith the enacting clause to which it was attached, was also not attracted in its application to such a case. A set-off under section 24(1) can only be claimed when the loss arises under one head and the profits against which it is sought to be set-off arise under a different head,…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492