HULASILAL RAMDAYAL, Vs. RE

JUDGEMENT

(1.) This is a reference under Section 66(2) of the Indian Income-tax Act by the Commissioner of Income-tax, Central and United Provinces. The facts of the case are that Hulasilal Ramdayal is an assessee in the capacity of a Hindu undivided family. It carries on business in three mohallas of Cawnpore under the names of (1) Hulasilal Ramdayal, General ganj, Cawnpore, (2) Badridas Beharilal, Collector ganj, Cawnpore, (3) Badridas Beharilal, Halsey Road, Cawnpore. The first shop does business in cloth and spices on commission and so did the third shop, but the second one does business in grain on commission. The question whether all these business are single or separate does not fall for determination in the present case because it is common ground that if all these businesses have been carried on during the accounting year, the loss of one shop can under Section 24 of the Act be set off against the profits of the other two shops.

(2.) The assessment year was 1937-38, but as the accounts of the assessee were made up from August to August the accounting year in the present case was from August 19, 1935 to August 21, 1936. The Commissioner has found that the third shop, namely Badridas Beharilal, Halsey Road, Cawnpore, was closed on October 17, 1935, that is within two months of the commencement of the accounting year. The first two shops made a profit and according to the assessee the last shop suffered a loss. The contention of the assessee was that under Section 24 of the Act the loss of the third shop should be set off against the profits of the first two shops.

(3.) The Income-tax Officer repelled the contention of the assessee and the question that he put before himself for decision was : "Whether the business at Halsey Road which was admittedly discontinued prior to the year under question was a branch business of the Collector ganj shop, as is alleged by the assessee, or was a distinct business independent of any other shop".