Law:

Section:

Section 25(4) of the Indian Income-tax Act, 1922 - Assessment in case of discontinued business - Assessment year 1945-46 - Whether relief under section 25(4) of 1922 Act is not restricted only to profits and gains assessable under section 10 but extends to entire income earned by exploitation of assets of business, profession or vocation although different items of income derived from different assets might be assessable under different heads - Held, yes FACTS The late GS carried on business of cotton ginning etc., and, had also income from property and dividends. He was an assessee under the Income-tax Act 1948. He died on 22-9-1944, leaving behind him his widow, 'I', she succeeded to the assets left by her husband and the business and continued to carry on the same. The relevant previous year for the assessment year 1945-46 was year ended on 15-10-1944. The Income-tax Officer computed total income of assessee late G.S. which included income from business, property, dividend and other sources. 'I' claimed relief under section 25(4) not only on income from business but also from property, dividend and other sources as all these assets were assets of business which her husband used to carry on and they were shown in the balance sheets as such. The Income-tax Officer held that the only relief which was admissible under section 25(4) was in regard to the assessee income from the business under section 10 of the Act. On appeal, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. On second appeal, before the Tribunal, both the parties accepted that the shares as well as the immovable properties were held as business assets. The department, however, still maintained that the income from properties and shares, which were assessable under sections 9 and 12 of the Act, did not qualify for relief under section 25(4). The Tribunal negatived the contention of the department, and concluded that the relief was allowable in respect of the entire income from the assets of the business irrespective of the heads under which same might have been charged to tax. On reference: HELD In the wider sense all income, profits or gains resulting from the…

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