Commissioner Oj!' Income-Tax, Andhra Pradesh, Hyderabad v. A. Dharma Reddy, Morthad

HTIHL ATAFA, ATH TSA7aaTA||. 7aaTA|coN,Yo aH west (Commissioner ofIncome-tax, Andhra Pradesh Vs._ A. Dharma Reddy) (19 wzad, 1969)| (Ftto Ho Mo stg, ao TAEATAT BIT To TAO Taz) efter grat dee daz, 1927 (1922 st 11), art 24 (2)(ii) stan fie 1955 H seen anf feat _faafea ca Ro oe aiter art gett nf ath BT ASAT FATqaaadt ae Te sea ee X safaa ara fear ar avatz? _fraifedt a fer oat & antes & etFX Ae aheadF APITAL FLAT AT | Teel GAT a gar gat H ae wpa Fi waawat Gt were ara faaifea feat warar ate ae ata calare HT AT7S ot fe ata Ht ar Ua-gazt & arg were aay arcet wa aT atfaatwarit Ist atx ag faafet et at ag. fraifedt a ag erat feat fe var.ad at At afar sort at cectad FX vorsaks afsse eta frat:ara athe, ae eam eae Rae, 1922 Ft aver 24 (2) (ii) B aeha TeaTEaTae a ek ae (gat wt A sais) F & gaa fear ary arfeu, ail_fratftedt ga at & ethos diet ofaat at arearz SaTAT At| MAST THATTarat aTaGT HT fear AIX Bas see st ota age mawAe aAtoo™fag atte aferag § car dae at fro ae wet ere Feawetar sat fase& wr A feat1 user famFX ca aorF(aiter at ate ag aeiter at fe aver24 (2) (ii)B seta Gere ot % facgat ayeara ar anfard at ot gd ad F arcane wat wtot, fratza adHat sa art wera zea arfec.| waz staver 24 (2) (ii) wt sraar amaoF faq farvaat faaafafaag, 1955 gra fae ne aaa Hagar ae oiaeTe at ar fae fraifedt aae fratca ay F agh areare sear arfed| dated atetaay gre sfaeaitrasaa ay arer F ay ofeada Pear waaz azeaqar 2 ate fratfedtat gaatzifagarar at far areare Barf aaa: sardt adi at ot aq frateq ag &Ht FAM AT WET aT| afe gan ataizl faufet ax di meat at, saat az wtaal & feats fart Hr SAH PILI, WA TH aE Ta HIATT HY eafaaTa BTOF aTay eoftal * arg unter A wary war%, aareyztwar) oadfaator ag & dha az dtr ora eafmat ® ara wetlerty BH areare war zeraT) wer 24 (2) % goaedt Saqare vt ae fe a fae fafa, 1955arer fag ae autgg 3, ag agy arcare aarat ter, afer sega aeF sala % fore arer 24/ 2\(ii) Fa fe agamas asa at gare at atgate oaarea ateae arqr Hoag areare frat arf gear: gard oS att, fai49% Fat aT aTTET “business” (#1@aT<) wez at oftarar tae aitamet2 (4) Fat mee) area” & orafa earnz, afersa or fatawaa Bre Tar Tet at ara AOS ay eararz, afnsa oT fafantzy aTweft aT Sl sa wet wr weed aga same & ate oeatafea ara featearner at facat za wat ei seqa areaeFY ag area ga arferdme & rot ae fre aah on fra areaSB saray aT zeta aie tA azVT ana TH AAA EM Va as faraifea fafera sata H fw sat gafeaaaT atiod Fearne BY AMAT TETI wa feat csediad oHara afafafear ae far art faa fratfcctiPUR ATT TT A wary a fro fraifedt ufeedaa ot fraifedd wat¢ afen ga Ga ar ez oH afters fratfedt 31 are 24 (2) (ii) & witwafaq Beat Bl aaa ga ahaa ey oPrataa a or a area ofeafaer wetat aval, St oa areare et wera«2 aatfe sa agt oafea warar zear 31 gaafa % fac, ata 24 & sath e aha qaat ast A searila st r$ &,qa sae se afte antares sqerey zl faa erfa var at, a fe otwey ANAT AT EBT eeeg. arian caaat fafan face aara afawra we wraa(Narain SwadeshiWeaving Mills Vs. Commissioner cf Excess Profits-tax), (1954) 26 a1g0Eto WIXo 764, 773; gIeHteTa AAA TAT BART BIAAT, BLA (DwarkadasLeeladhar Vs.. Commissioner of Income-tex, Kerala), 47 Toeto WIT619; Gao arranteg aay watowtaaa,facet (S. Narain Singh Vs.Commissioner of Income-tax, Delhi}, 66 WTgo eto WIXo 347 MIT atareaMaa Wa TATA ATE ATTA (Sitaram Motiram JainVs, Commissionerof Income-tax), 43 WTSo Fo mIto 405; fafase feu qT| fafas acta afsaticar: 1966 #1 fo 1057 aret fafa adie| 1962 #Wo48 attfafacz aiaFf aresr gée seq carqiad #arte 17 asa, 1964 art faata ait wag % fees adie| aaa at wie aqaqa UdofAal, AltoWao FAT WIT stoSto THT| meat wt we aAFAl« TH Elo. FATSo. WMT Ho HATA| earaiaa at faata earatfacfa co Uo wat a feartvarattaafa tar— WANT We sea F Gea eqrarayg F faata F faz sary AHTel Te @1 Sea roraraa 4 aod faatargqare afaaear are fatese ax faaizayay 1956-57 % fav faatfedt H fate & saya aa ara farafefiad sq atSat Taree BT FT ae faatheat F cet A feqr ar— COMMISSIONER OJ!' INCOME-TAX, ANDHRA PRADESH, HYDERABAD • v. A. DHARMA REDDY, MORTHAD February 19, 1969 (J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] Income-tax Act (11 of 1922). s. 24(2)(ii) as amended in 1955-Loss sustained by a partner in a dissolved firm, if can be set ofi against profit earned in anuther firm in the subsequent year. The assessee carried on two businesses in Didi leaves as partner in two different firms. The first firm consisted of two partners, and the C second of four; both these firms were assessed to income tax separately and it was admitted that the two finns had nothing to do with each other. The first firm sustained losses and was dissolved. The assessee claimed that the losses sustained by him in the previous year (sustained in the first firm) should be carried forward and set off against his profit in the subsequent year (earned in the second firm) under s. 24 (2) (ii) of the Income-tax Ac~ !922 as the assessee carried on the business in Bidi leaves durin11 that year. The Income-tax Officer rejected the claim, and D his order was upheld by the Appellate Assistant Commissioner. But the Appellate Tribunal accepted the claim and the question was answered by the High Court in the assessee'a favour. The Revenue appealed to this Court and contended that for gettillll the benefit under s. 24(2)(ii) the same concern or partnership which carried on in the previous year would continue to function in the year of assessment. HELD : The appeal must be dismissed. In order to &Ct the benefit of a. 24(2) (ii) of the Act especially after the amendment made by the Finance Act 1955 it was not necessary that the assessee should carry on the same business in the year of assessment. The change in the language of the provision substituted by the Amending Act was significant and all that the assessee had to show was that the business in which Joss was originally sustained continued to be carried on by him in the assessment year. If the first partnership wa• dissolved it did not mean that his business i• Bidi leaves came to an end so long •• he continued to dp that business either individually or in partnership with -others. During the assessment year in question he was carryina on that business in partnership with three others. According to the provisions of s. 24(2) as they stood be-fore the amendment made by the Finance Act of 1955 he continued to carry on the same business but for the purpose of the present case s. 24(2) (ii) as it stood after the amendment was relevant and on the plain language Of the aforesaid provision the _business in which the loss was originally sustained was continued during the assessment year. The word "business" bas been defined in s. 2( 4) of the Act as including any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. These words are of wide import the underlying idea being of continuous exercise of an activity. In the pre-sent case, the business did not depend on the constitution of a partnership firm through which it was carried on nor could it come to an end so long as the a,sseuec carried on the aame ryatematic or or1,.'l.niled coune of activity with a set purpose. [786 G--787 CJ A When the profits of a registered firm are ascertained, the as..,ssee for the purpose of paying tax is not the registered firm but each partner .of that firm. The Identity of the business for the purpose of s. 24(2) (u) does not change by reason of the change in persons who carry on that business since it continues to be carried on by the same individual. A set off for loss which had been carried forward from the earlier years under the provisions of s. 24 would only be available to the individual partner who had suffered the loss and not to the other partners of the firm or the firm. (787 FJ can fraifedt taz at are 24 (2) # soarat & wala ga araHe faa grax 3 fe az FAG To TH Veet, Ales aaa faufer GA a2 WIT aT FATT ay 1955-56 # feae ats a a we 3, fasterart fare at aattfaat (unabsorbed) aft #1, HT 24.532 eam atay 1956-57 & fay aot wea areare are H sf gare He aH?” faa ifeal ca cafe 2 feast oaat ueara ma faferrariiarctayaa Has Ae gssa HATH gear St weg Hieare aar wai af at AIKat HA aT AT ast ofaal |r areare Gar <i Aoeet GA aT afaaTa aad Co TH Lest, AHS, AT GatGA FT To aH West avs srqat, feared Fay F Gare GTaT atMam MATBT31ara, 1955 FT fared HXfear qat, afer eet wefan fratem ay 1956-57 F ehrr aadt ctfagiza ay1955-56 & ataa faaifed wl ceefi wa A 30,255 wax atalfa gardt og)1 aut ag He mea BTTaTT waT werat, safer arsesFAUT BAHB TATA se aefeu va at erfs vara sel az Her fre HX24,532waa ati faaicar ad 1956-57 & ahoa gadi waOHfaeifedt arara 11,853 era yafaa fear var aie sa featem ag ® fou gaat FaHUaT Ta 28,758 waa farifra ai aE at1 sath faaifedt va ag F aistofaat ar arart AATtar at, safau saa ag ear fear fe ga ay aigfart ay 1955-56% saat arta vartt gel at oa mada fear oraaifga atx gene faa daz, 1922 a faa eae sae TIAA ‘Wee’ Hel AAT 2, URI24(2)(ii) * adi cearaadh at 1956-57 # sae are # aft gaa fearsat argc1 araat atfnat A ga are at arate wt featsaat fareat fe qau saat awl agate feat or aaa afe ag arzarz, afa ar eae,faut gift qua: sat ost at, Gana fasta ag F chara at faatfeat graSAAT HAT Tt atSaar wear z fe, fa Hreare F 30,255 was atariasana #1 we At ag HITaTT 31 ATs, 1955 BT sa He ® fears F area afacaH ad ter atte Fadia aeraa aged AF stat wat H ToT ae fare fear|geet wa H, feat gaa: ofa ge at ale ot gana fratea ay a afeaca 4 avalwiot, A wax1 gad wa 4H, feaat ara a a arta ar ga & fargga fear wat ar, BIT were A1 aa BAT FT geH aH fraruat arg aiff aut fatal sr faatca ag 1955-56 * far gre gaa fray fear var aryfraifedt X artte16 faataz, 1960 are aaa oa H ae ears far ar fHata wat ar oe gat a Hs araes at @ dat as fewerHF far wl stearagt at at fe faafer wa F ereart at gat wa At wat ara H @ fearTa ali wa:wdia aeae alga + ag fasey frarar fH fra areatt HFarfa qad: gordt gt at, Tay are ag aét ear at aaat fe ag faatcarag1956-57 ® aera art werfasifedt F ga far qe oraax ataafin & ae Wazar frat ait saa faathral al ga aca Fl aaa TETfe atst afaat ar aa areare fratear ay & aua ait tat| afaragatefaaifedl aret ofrat & at areary ct fafued wal F attart & wT Aat Tel al| gt HAL aA a ow GF fasted ae at ag at, afea fratfedt saiHITaIT HI VA aT H, wa Hite faareata Mt, WI asarTrarey F arg fax amar teal| Gea eataTaT A aga A arearey om & faarewed fara ar farverstfrat) Sea eqratag Fag aa aaa feat—| Narain Swadeshi Weaving Mills v. Comn1issioner of Excess Profits Tax, (1954] 26 I.T.R. 765, 773, Dwarkadas Lee/adhar v. Commissioner of Jncome .. tax,' Kerala, 47 l.T.R. 619, S. Narain Singh v. Cpmmissioner of Income-tax, Delhi, 66 I.T.R. 341 and Sitaram Motirani JGin v. Commis-sioner of Income-tax, 43 I.T.R. 405, referred to. c CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1057 of 1966. Appeal from the judgment and order dated April 17, 1964 of the Andhra Pradesh High Court in Case Referred No. 48 of 1962. S. Mitra, R. N. Sachthey and B. D. Sharma, for the appellant. S. T. Desai and K. Jayaram, for the respondent. The Judgment of the Court was delivered by Grover, J. This is an appeal by certificate from a judgment of the High Court of Andhra Pradesh answering the following question referred to it by the Tribunal. arising out of the assess-E ment of the assessee for the assessment year 1956-57 in the affir· mative and in his favour : "Whether the assessee is entitled under the provi-sions of Section 24 ( 2) of the Act to set off his share of unabsorbed loss amounting to Rs. 24,532 from the F dissolved firm to M/s. A. Dharma Reddy, Morthad brought forward from the assessment year 1955-56 against his other business income for the assessment year 1956-57." The assessee is an individual whose only sources of income were his. shares !n sever~ partnership concerns. Apart from the G firms which earned on other businesses there were two firms which carried on the business in Bidi leaves. The first was styled as M/s. A. Dharma Reddy, Mortbad. The secqod firm was called A: Dharma Reddy & Co., Ditchpally. The first partnership wa> dissolved on March 31, 1955 bUt the second one continued during the assessment year 1956-57. During the assessment year H 1955-56 the assessee sustained a loss of Rs. 30,255 in the first firm. As he was carrying on .several other businesses. after the necessary set off the total loss sustained by him for that year came to Rs. 24,532. During the assessment year 1956-57 the uma ae GH BTTATT Taradl F A, ae Var areare Flat FM sawet e unfterdd are sara aay BAT HAH aafor Aralare TT HTfaaifcr feat stat &1 Ta <faediea ays ara afufafad at faqara & aa at aT dara wea H sata H fra <faedigd TA fraifedtaie afen ca cfredige wd ar qc UH aTflare fraffedt 2 egyameat 1955-56 Fast ® ofer faat 1955-56 Fast ® ofer fa 1955-56 Fast ® ofer fa Fast ® ofer fa ® ofer fa ofer fa faat arf ® areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate arf ® areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate ® areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate Prat1 ag wat fraifedt ae 1955-56 1 fratem wate1 ag wat fraifedt ae 1955-56 1 fratem wate ag wat fraifedt ae 1955-56 1 fratem wate wat fraifedt ae 1955-56 1 fratem wate fraifedt ae 1955-56 1 fratem wate ae 1955-56 1 fratem wate 1955-56 1 fratem wate 1 fratem wate fratem wate watefartcaag 1956-57 & aaa ater ofeat ar sgl BIST AT Wale[.]aret & arg wrtardt H aaa Tart UH HH A oH wPilert FH arg ATaa Ga A cla wetted F ara arftardt Hea BAT. TATA HT HATwae et at; afer areas oH A reat aT, wate Ast Theat sr sareqe 24(2)(ii)F ae wrt aval sl 7e fH BITATT TAATT fagica ag Aft alt ayers a arlene ar eet grer TATAT Tra EAT ATEN TAA FAag H aqarar star at, wa fe Freifedt at aris gare: sort TST at | geaug are fafsa canara ad ae & fe “sae (fratfed) ara adt ar<arzwear Wa Tear afer”oo ameat 1955-56 Fast ® ofer faat 1955-56 Fast ® ofer fa 1955-56 Fast ® ofer fa Fast ® ofer fa ® ofer fa ofer fa faat arf ® areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate arf ® areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate ® areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate areare garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate garit vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate vet FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate FH A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate A ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate ft Prat1 ag wat fraifedt ae 1955-56 1 fratem wate Prat1 ag wat fraifedt ae 1955-56 1 fratem wate1 ag wat fraifedt ae 1955-56 1 fratem wate ag wat fraifedt ae 1955-56 1 fratem wate wat fraifedt ae 1955-56 1 fratem wate fraifedt ae 1955-56 1 fratem wate ae 1955-56 1 fratem wate 1955-56 1 fratem wate 1 fratem wate fratem wate wate WART TgRT B, HT SUIT aaa aitaral g, faa. srseda Ft aeitatl at faqeia wea & far ag wrasan gfe gard HrqAt Gay satura faroad fact afrfraa, 1955 are fac ag amaFt qa qT 24(2) Ba vHe AI— wee (2)Where any assessee sustains a loss of profits or gains in anyYear, being a previous year not earlier than the previous year for”the assessment of the year ending on the 31st day of March,1940,in any business, profession or vocation, and the loss cannot bewholly set off under sub-section (1) so much of the loss as is not so afgral Hag Fa THIS al AHAT 2— “«(2) wei fat freaifedt at, fae artat, afa a eaaaa afeel da ag A; Tt gs at Ma gu vt 31 ard, 1940 wr aaa aaata ag & fax faster & fag ga ag a qdac at 8, avatar ata|aril a alfa vara qgdt 2 ate fae giftar same (1) % ala set off or the whole loss where the assessee had no other head ofincome shall be carried forward to the following year andset offagainst theprofits and gains, if any, of the assessee form the samebusiness, profession or vocation of that Year. maT 24 aT Sore (2) gata fact afaferr a rer 16 ater feetfaa at we ft) ga are at arias wnt ga gare e—. assessee's profit in the second firm was estimated at. Rs. 11,853 and his total taxable income was assessed at Rs. 28,758 for that assessment year. As the assessee carried on the business in Bidi leaves during that year he claimed that the loss sustained by him in the previous year viz;., assessment year 1955-56 should be carried forward add set off agamst his prolit in the subsequent year 1956-57 under s. 24(2) (ii) of the income tax Act 1922,, here-B inafter called the "Act". 1'.he Income tax Officer rejected the claim. His view was that the set off could be allowed only if the business, profession or vocation ill which loss was originally sus-tained continued to be carried on by the assesssee during the refo-vant assessment year. According to him the business in which the loss of Rs. 30,255 had been incurred had ceased to exi>t c because of the dissolution of that firm on March· 31, 1955. The Appellate Assistant Commissioner in appeal considered the cons-titution of the two Jirms. The lirst consisted of two partners in which originally the loss had occurred and which had ceased to exist in the relevant assessment year. 'l'he second firm against whose income the loss was sought to be set off consisted oi four D partners. Both the firms had tiled separate retur,ns and were assessed separately for the assessment year 1955-56. The assessee had admitted in a latter dated September 16, 1960 that the two firms had nothing to do with each other and there was no material to show that the business of the dissolved firm was taken over by the other firm. The Appellate Assistant Commissioner, therefore, came to the conclusion that the business in which the . E loss was originally sustained could not be said to have continued during the assessment year 1956-57. The assessee took the matter to the Income tax Appellate Tribunal which upheld the contention of the asscssee that the same business of Bidi leaves continued during the assessment year. According to the Tribunal the assessee was carrying on two businesses in Bidi leaves as F partner in two different firms. One of these firms was dissolved but he continued to carry on the same business in conjunction with his co-partners in the year uncl~r appeal. The High Court disposed of the matter in a fairly simple way. It was observed : "When a firm carries on business. it is a business carried on by the partners of that firm and the indivi-dual partners of that firm are assessed to tax. When the profits of a register¢ firm are ascertained, the asi;essee, for the purpose of paying the tax, is not the registered firm, but each partner of the registered firm. In the present case, it was· in the business in the beedi leaves that the assessee sustained a loss for the assess-ment year 1955-56. He carried on the same business in beedi leaves during the accounting year 1955-56 i.e., the assessment year 1956-57 thou&h in partnership A with others. Entering into partnership with another in one case and three others in the other case, was only the mode of carrying business; but the business is the same business viz., trade in beedi leaves. Section 24(2) (ii) does not require that the business should be continued to be carried on for the assessment year in question by n the same concern or partnership or firm as m the pre-vious year when the loss was originally sustained by the assessee. The only condition prescribed by that clause is that the same business must be continued to be carried on by "him" (the assessee)". c In order to dispose of the contentions of the learned counsel for the Income tax Commissioner who is the appellant before us it is necessary to set out the relevant statutory provisions. Before the amendment made by the Finance Act of 1955 s. 24(2) was as follows :- *«<(2)Where any assessee sustains a loss of profits or gains in anyyear, being a previous year not earlier than the previous year- for_the assessment for the year ending on the 31st day of March1940,in any business, profession or vocation, and the loss cannot be—wholly set off under sub-section(1), so much of the loss asis notset off or the whole loss where the assessee had no other head ofincome shall be carried forward to the following year, and (ii) Where the loss was sustained by him in any other business,profession or vocation, it shall be set off against the profits aeqTa: ga at fear at awa, at saat alfa faadl ar yar ZaWIC aal fear wart & ar argu gift, wai fratfedr at ara ar aE aeqwea tat 3, Ts ag} fae gata st wait ait sa ag F vetwltart, afa ar eraara & fratfeat & arat ate afwarat %, af asat, ofa aerers fear area| (2) aet fret fraifedt at, fat arzatc, af aT qaqa Ffret Ue ag H, at gh ag ga gu wi 31 ad, 1940 at wareAzaag # fac qa ag a qaaz adh a, andi ar afwarat a arf sortqsat @ ate fra arf er srarer (1) H aeiia aeqata: yore aah ProST ahaT agt saat eft fraat ar goer sa gare ay frat var 8 ararga eft, vet fautfedt et arr ar ag ora aida ag a: ane adHe fae wqala at srusit, wx (ii) wet se fret oer arcane, qf a eager H ath varitqt ghagi saat sa ad F gee gre war mF are _andcarried gains on by if any, of him any‘in business, that year; profession provided or vocationethatthebusiness, profession or vocation in which the losswasoriginally sustained continued to be carried on by himin that year.”.a — aefrerrett fagry araeter FT oft ah fag a qert: FI TTarea heet& fe tat wat & anfers faea-fareat & Tait faaifedt dat wat ar anitaat ag acter &t veg fr af teett GA 31 ard, 1955 a faafer aTTR«at, gafau ag vat wert ana fae faa arzart # alfa garat Tet aT aeRae at arer 24 (2) (ii)garata faaifedt are frat at 1956-57 aata FAT Hat Tet| a TAH ae HATTA H faq Ae AAA& fe faa areart Haifa gard) Tet al se TeATT fate ad Hat sareara teat ATfET AT| FART md diag gat é@ fa cal ayaa aT wrTalarzy Ftgg ad Frat Far Al ot, frat adHat ge ara sare eat aTfaT| gitar at ate A fee aq ga sft F arg afar at g fe Uaeat are 24 (2) (ii) Braet ott & fav, faaraar faa ufafaaa, 1955 grrfat mo deter ® oeara, fraifedt at va Frater at A agh FATT HATarfea 1 avian afafeaa are sfreanfirr soar aT areT Hooft ofa frarat Bag azagel & ate fraifedt at evar gt feaaiar ef fea sreare 8aft yaa: Sarat Tet aT TA AR fagica ag 8 a} ware oT <er aT | 3agega arma &, fasifedl aa areare F Haar AS ahaa Ht HVAT AarATary ag areart ag UH aT oafaT Fara writ A FT TT TI tatava gg MT arate aTST qfaat ar Sar Ay maar TaHT salele HWA HFarary Hart qe HITT ae wfaata BI a ar fea aa sated & atawrtlaret F Ht aHat arafe sam ward fauferax A we eh at gearge aad aét 8 fe Ae ofaat ar vase Trea, aa at aS Ja FIST HYsafearta BTSat wa cafaaat F as aired A wart war z aaa amat| weama fraten ad & dros ag fafesa eg & dia ara aafeaal & arg careare, afer ar aaaara &art site afrarat & afe arg a,—osfa gare frat saat, Teg fore arcane, afer aT sqaera% aft qe: garth cet at,sa aR gre ga ae A TaTTard teat arfer 1”|- [1970] 1 Ho fio go 0 "(2) Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on 31st day of March, 1940, in any busi-ness, profession or vocation, and the loss cannot be wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee E had no other head of income shall be carried forward to the following year and set off against the profits and gains, if any, of the assessee from the same business, profession 6r vocation of that year ........ " Sub-section (2) of s. 24 was substituted by s. 16 of the aforesaid F Finance Act. The material portion was in the following terms:- "{2) .Where any ass~ssee sust11;ins a loss of profits or gams m any year, bemg a prevmus year not earlier tha~ the previous year for the assessment for the year G ending on the 3 lst day of March 1940 in airtv business profession or vocation. and the loss c~nnot be wholly set off under sub-s. (1), so much of the loss asc is not set off or the whole loss where the assessee had iOO other ~ead of income shall be carried forward to the follow-mg year, and (ii) where the loss was sustained by him in any A other business. profession or vocation. it shall be set off against the profits and gains, if any, oi any business, profession or vocation carried on by him ~n that year; provided that the busi-ness, profession or vocation in which the Joss was originally sustained continued to be carried ll on by him in that year." The arguments of the learned counsel for the appellant are based mainly on the fact that the partners of the two firms were different although the assessee was a partner of both the firms. It is contended that sjnce the first film was dissolved on March 31, 1955 it could not be said that the business in which the loss was sustained continued to be carried on by the assessee durin~ the assessment year 1956-57 within the meaning of s.24(2)(ii) of the Act. For getting the benefit under that section it was essential that the business in which the Joss was sustained should be continued to be carried on for the assessment vear ;n question. This means that the same concern or part~rshio which carried on the business in the previous vea" should continue to function in the year of assessment. WTA A FIRST FAT Latar)ae eel ate FHT aT awaT aTaTeT 24 (2) # guard & agqare dt aa fe 3 faa afafran,1955 arefeu mu amtaa & af Fag agt arearx Baar tet, afer setae areamataatt % fre aret 24 (2) (ii)a, fa fe az dates B oeara at, gana2 gated svaeq at eqee rer # at me HTaH aatstar fa az aaufafaaitea fear at aaa 2 fe fra man F aft qaqa: vert oat ttag fratea ay 1956-57 % dtora adt aarar oT Er AT1 “business” (#I<aTz)meg at afcarer tae st aver 2 (4)FA as B1 Carat”genta arsearare, arftasa at fafaatar waar are tar tae ar ageara wt BBY earary,aifasa ar fafrate at waft arf.zat mest at meq aga aaah 2 aXsratafga urat fret Pareaie at froac aa wear 21 Har fe array Taaaitfatan free sare afaarr ee argaa (1) H rato WHo Ito ATA A (FS fH4 3H aaq 7) aaa g fH “business” (#reaTz) wae feet fafera sataAfaq ag areafan, ara alt eaafead gaat dufsa