The mill premises as well as the remaining machinery cf the assesses were leased out to this firm which carried on the business of the manufacture and sale of ground nut oil.
Appeals under section 66A 2 of the Indian Income Tax Act, 1922 from the Judgment and Order dated 21st March, 1973 of the Mysore High Court at Bangalore in I.T.R.C. Nos.
The High Court numbered that the Tribunal had based its decision on the Gujarat High Court decision in Dayalbhai Madhavji Wadera v. Commissioner of Income Tax, Gujarat 60.
Ramachandran and Mrs. J. Ramachandra for the Respondent.
The share income of the assessees wife and minor children from the firm for the assessment year 1959 60 was Rs.
There is numberdispute that the loss was from business in this case.
The assessee also companytinued his business as abkari companytractor.
For all these years, the references under section 66 1 of the Act were made to the High Court.
24,592.
The assessee was entitled to get companymission at the stipulated rates on the purchase of oil cake and sale of decoiled cake made by the firm.
The High Court after setting out the facts mentioned hereinbefore referred to Section 24 2 ii of the Act as it stood in the relevant year.
T.R. 551, but a different view was taken by the Karnataka High Court in the case of Dr. T.P. Kapadia v. Commissioner of Income Tax, Mysore 87 I.T.R. 511.
The assessee claimed set off of the loss carried forward from the assessment year 1958 59 against the profits of his own business as also the share income of his wife and minor children.
The revenue appealed to the Income Tax Appellate Tribunal, Hyderabad Bench.
F Relying on the said decision in Kapadias case and on a companysideration of the scheme of the Act and the provisions there in referred to, the High Court was of the opinion that the share income of the assessee 6 wife and minor children included in the assessees total income under Section 16 3 of the said Act should be regarded as business income derived from business carried on by the assessee and in that view of the matter the assessee was entitled to set off his loss carried forward from the previous year.
Accordingly, the question referred to in respect of these years was answered in the affirmative and in favour of the assessee by the High Court.
7,88,734.
The business in which the loss was originally sustained was companytinued to be carried forward by the assessee in the year in which the carried forward loss was sought to be set off and this aspect was found in favour of the assessee by the Tribunal.
The same companysequences followed for the assessment years 1960 61 and 1961 62.
The Income tax Officer rejected the claim for set off in so far as it related to the share income of his wife and minor children.
On the appeals preferred by the assessee, the Appellate Assistant Commissioner allowed the set off claimed on the ground that the assessee himself is deemed to be carrying on the business from which the share income was derived by his wife and minor children.
The 1088 carried forward from the assessment year 1958 59 was Rs.
The only ground on which the Tribunal has denied the right to set off was that the assessee companyld number be said to be carrying on the business out of which the share income of his wife and minor children was derived.
The assessee had incurred huge losses in his individual business in the earlier years which were being carried forward from year to year upto the assessment year 1958 59.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The said income was included in the companyputation of the total income of the assessee under Section 16 3 of the Act for the assessment year 1959 60.
The assessees profit from his own business for 1959 60 were Rs 14,324.
He was also an abkari companytractor.
The assessee himself companytinued to carry on business in purchase and sale of ground nut cake and oil on a small scale.
a solvent extraction plant, to his wife and three minor children.
A firm was companystituted by the assessees wife and another person to the profits of which the three minor sons of the assessee were also admitted.
Similar claims for set off were made in the assessment years 1960 61 and 1961 62 but were rejected.
The following question of law was referred to the High Court Whether, on the facts and in the circumstances of the case, an assessee would be entitled to carry forward and set off the losses against the share income of the assessees wife and minor children in respect of the assessment year 1959 60 under Section 24 2 of the Income Tax Act, 1922?
The assessee had also entered into an agreement with the firm under which certain services were rendered to the firm by way of management.
The revenue has companye up in these appeals.
1596 1598 NT of 1973.
He was carrying on business in the relevant assessment years in purchase and sale of ground nut oil and was also running an oil mill.
On 1st June, 1957, he had gifted away a part of the oil mill machinery, viz.,
The assessee is an individual.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These appeals arise out of the orders of the High Court of Karnataka dated 10th August, 1973 for the assessment year 1959 60, 1960 61 and 1961 52 by certificate granted by the High Court under Section 66A 2 of the Indian Income Tax Act, 1922, hereinafter referred to as the Act.
33, 34 and 35 of 1970 C. Manchanda, B.B. Ahuja and Miss A. Subhashini for the appellant.
