COMMISSIONER OF INCOME TAX Vs. KISHENLAL BADRILAL

JUDGEMENT

(1.) THE IT Tribunal at Bombay has referred the following questions of law for determination under s. 66(1) of the Indian IT Act:

(2.) FROM the statement of the case it appears that the assessee who is an HUF submitted his returns for the Samvat year 2003 -04 (25th Oct., 1946, to 12th Nov., 1947). The family gets its income from house property, agriculture, commission business in the name of Ramnarayan Shivnarayan of Partur and a yarn and cloth business in the name of Shivnarayan Bros. at Secunderabad. A return filed by the assessee showed a loss of Rs. 4,132 in speculation in Bombay which was sought to be deducted from the profits of the family business. The ITO rejected this contention and refused to adjust the amount in computing the profits of the business. On appeal, the AAC held that the transaction relating to this speculation was controlled from Hyderabad and that the loss should be considered to have accrued within the State. The Appellate Tribunal, however, relying on the case of CIT vs. Murlidhar Mathurawalla Mahajan Association (1948) 16 ITR 146 (Bom) directed the ITO to allow the assessee to set off the amount of Rs. 4,132 against his profits from the business in this State. In our view, the Tribunal was right in so directing.

(3.) WE had in the case of CIT vs. Baliram Santhoba (1954) 25 ITR 309 (Hyd) held that such a loss incurred in Bombay could be set off against the profits earned in this State. The learned advocate for the Department frankly and quite rightly submitted that in the light of that judgment he cannot press the point raised by the Department. Having regard to the view expressed in the aforesaid case, the first question will be answered in the affirmative.