GAINDI BAI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a statement of a case submitted to this Court by the Income-tax Tribunal, Delhi Bench (C) at the assessee's instance inviting this Court to answer the following question: --

(2.) THE set off is claimed under Section 24 (2) of the Indian Income-tax Act which, as it stood in 1951-52 prior to its amendment in 1955, was as follows:-

(3.) THERE is sense in the law that when a business is carried on for a number of years a loss sustained in one year may be set off from a profit made in a subsequent year but there is no sense in permitting a loss sustained in a year in one business to be set off from a profit in another business in a subsequent year merely because it is of the same nature as the other. If a loss is permitted to be set off from a profit of another business I fail to understand why it should be permitted only when the two businesses are similar. In respect of one business on account of its artificial division into yearwise portions there may occur a loss in some portions and a profit in other portions and the net result in the end may be anything. THERE is sense in requiring that the assessee should not pay tax merely because in an artificial portion he makes a profit though in another artificial portion he suffers a loss and the net result is either a loss or a small profit or neither a loss nor a profit. This consideration does not apply when he carried on two businesses even though of similar nature.