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TMI Blog1971 (1) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... tered 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 execution of the agreement. According to clause 7 of the agreement, pending completion of the sale or delivery of possession of the premises to the purchaser, the vendor was to carry on business on behalf of the purchaser and run ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved 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 circumstances of the case, dividend income was to be taken as income, profits and gains of business of the company and set off against losses brought forward from earlier years under section 24(2) ? " Since certain other questions ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 findings of fact given by the Tribunal and against the assessee. The fifth question was not pressed and was not answered. The sixth question was covered by the second question and, therefore, no answer was returned with regard to it as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, 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 accounting year. The machinery and plant had been used for the purpose of the business. The sale of the colliery took place during the accounting year. The loss of Rs. 11,257 was written off in the books of the appellant. The present case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation 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 contradistinction to sub-section (1) is concerned only with the business and not with its heads under section 6 of the Act. Dividends are included in the meaning of income under sub-section (1A) of section 12 which is the residuary head. Applying the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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