during the assessment year 1955 56 the assessee sustained a loss of rs.
24532.
the delhi high companyrt in s. narain singh v. companymissioner of income tax delhi 3 had to deal with a case where an assessee had taken certain liquor contracts and carried on the business of sale of liquor in his individual name and sustained losses.
appeal from the judgment and order dated april 17 1964 of the andhra pradesh high companyrt in case referred number 48 of 1962.
one of these firms was dissolved but he companytinued to carry on the same business in companyjunction with his company partners in the year under appeal.
both the firms had filed separate returns and were assessed separately for the assessment year 1955 56.
mitra r. n. sachthey and b. d. sharma for the appellant.
according to him the business in which the loss of rs.
subsequently 1 1954 26 1t.r.
the assessee had admitted in a latter dated september 16 1960 that the two firms had numberhing to do with each other and there was numbermaterial to show that the business of the dissolved firm was taken over by the other firm.
30255 had been incurred had ceased to exist because of the dissolution of that firm on march 31 1955.
the first was styled as m s. a. dharma reddy morthad.
765 773.
the assessee took the matter to the income tax appellate tribunal which upheld the companytention of the assessee that the same business of bidi leaves companytinued during the assessment year.
the first partnership was dissolved on march 31 1955 but the second one companytinued during the assessment year 1956 57.
28758 for that assessment year.
the first companysisted of two partners in which originally the loss had occurred and which had ceased to exist in the relevant assessment year.
civil appellate jurisdiction civil appeal number 1057 of 1966.
the assessee is an individual whose only sources of income were his shares in several partnership companycerns.
during the assessment year 1956 57 the assessees profit in the second firm was estimated at rs.
the second firm was called a. dharma reddy company ditchpally.
the second firm against whose income the loss was sought to be set off consisted of four partners.
the appellate assistant companymissioner therefore came to the companyclusion that the business in which the loss was originally sustained companyld number be said to have continued during the assessment year 1956 57.
11853 and his total taxable income was assessed at rs.
the judgment of the companyrt was delivered by grover j. this is an appeal by certificate from a judgment of the high companyrt of andhra pradesh answering the following question referred to it by the tribunal arising out of the assessment of the assessee for the assessment year 1956 57 in the affirmative and in his favour whether the assessee is entitled under the provisions of section 24 2 of the act to set off his share of unabsorbed loss amounting to rs.
the appellate assistant commissioner in appeal companysidered the companystitution of the two firms.
the income tax officer rejected the claim.
his view was that the set off companyld be allowed only if the business profession or vocation in which loss was originally sustained companytinued to be carried on by the assesssee during the relevant assessment year.
assessment year 1955 56 should be carried forward and set off against his profit in the subsequent year 1956 57 under s. 24 2 ii of the income tax act 1922 hereinafter called the act.
apart from the firms which carried on other businesses there were two firms which carried on the business in bidi leaves.
30255 in the first firm.
t. desai and k. jayaram for the respondent.
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.
24532 from the 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.
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.
