TMI Blog1971 (1) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the assessment year 1956-57, the relevant accounting year being from September 1, 1954, to August 31, 1955. The assessee owned a colliery called the Western Kajoria Colliery, hereinafter referred to as "colliery". It entered into an agreement with another company on November 29, 1954, to sell the colliery to it. According to this agreement the vendor was to sell and the purchaser was to buy as on and from September 1, 1954, all the underground rights, etc., of the colliery with the machinery and other articles detailed in the schedules annexed to the agreement. It is not necessary to give the details of the other stock-in-trade which the purchaser was to purchase. The sale was to be completed within one year from the date of the execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing year. The Income-tax Officer included these dividends in the company's income under section 12 of the Income-tax Act, 1922, hereinafter called "the Act". The assessee failed to satisfy the authorities that the income received on account of the dividends could be set off against the loss in business of earlier years brought forward. The Tribunal made a reference of the following two questions under section 66(1) of the Act : " (1) Whether, on the facts and in the circumstances of the case, the sum of Rs. 11,257 being a claim for loss on sale of assets on which depreciation was allowable in earlier years is allowable under section 10(2)(vii) in computing the total income of the assessee ? (2) Whether, on the facts and in the circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September 1, 1954, for and on account of the purchaser. While recognising that the coal business was not stopped as from September 1 1954, the High Court came to the conclusion that it was on account of the purchaser that the business was carried on and any profits or losses which might have resulted until the actual sale were to be those of the purchaser and the vendor was to get only the price fixed together with interest. The first question was answered against the assessee. The second question was also answered against the assessee on the view that no colliery business in the relevant year was carried on by it and therefore no question of set-off could arise. The third and the fourth questions were answered in accordance with the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms, upheld the contention of the appellant that it had actually carried on the business till November 29, 1954. Section 10(2)(vii) provides that profits or gains shall be computed after making the allowance in respect of any such building, machinery or plant which had been sold, etc., the amount, by which the written down value thereof exceeds the amount for which the building, machinery or plant is actualy sold or its scrap value. The first proviso requires that such amount should actually be written off in the books of the assessee. It is difficult to see how all the conditions necessary for the allowance under the above provisions were not satisfied. The colliery business was carried on by the appellant during part of the relevant acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Radhaswami Bank) that section 6 of the Act classifies the taxable income under the several heads but the scheme is that income-tax is one tax and section 6 only classifies the taxable income under different heads for the purpose of computation of the net income of the assessee. While sub-section (1) of section 24 provides for setting off the loss under one of the heads mentioned in section 6 against the profits under a different head in the same year, sub-section (2) provides for the carrying forward of the loss for one year and setting off the same against the profits or gains of the assessee from the business in the subsequent year or years. It was emphasised in the aforesaid decision that sub-section (2) of section 24 in contradistincti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
