9911796707
TMI Blog1965 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year of assessment, which is the assessment year 1956-57, the previous year being the year ended Bhadon Sudi 2, Sambat 2012, he carried on business in speculation and money-lending at Agra in the name of Makhan Lal Ram Swarup, hereinafter referred to as head office. He also carried on another business under the name and style of Messrs. S. D. Gupta & Co., hereinafter referred to as the branch, in which the business was confined to speculation business alone. The assessee kept only one account for expenses incurred in the head office and branch business carried on in the aforesaid names. Accounts of the branch showed a net speculation profit of Rs. 96,612, where as there was a gross speculation loss of Rs. 1,02,451 claimed in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. The result was that the gross loss in the head office of Rs. 1,02,451 increased by Rs. 3,000. The net loss, therefore, at the head office from speculation was determined at Rs. 1,02,451 and setting this off against the profit of Rs. 96,612, the net loss of Rs. 8,839 was directed to be carried forward and set off against future speculation profits. The only objection taken by the assessee was to the addition of Rs. 3,000 as estimated expenses in respect of the speculation business at the head office. The contention was that where an assessee is carrying on a single business, and a part of the profits of the business is not liable to tax, the deduction of expenses of the business should be allowed in its entirety although a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal was in error in relying upon the explanation to section 24(1) of the Act and if the explanation to section 24(1) has no application then according to him the provisions of section 10(2) do not permit the splitting up or apportionment of the expenses of various businesses that may be carried on by the assessee. There is no force in this contention. All that was held in that case was that for the purpose of computing the profits and gains from business under section 10, proviso 1 to section 24(1) had no application ; that the first proviso to section 24(1) does not govern the computation of profits and gains for the purpose of section 10 and that the proviso should be read only when the provisions of section 24(1) are applied. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es between the two sets of businesses in order to determine the true loss which had to be carried forward ? Ordinary commercial practice and the principles of accountancy require that a person, who has several businesses, particularly if they are being carried on at different places and not under one roof, should be able to tell at a glance which business is yielding profit and which is running at a loss. Each branch ordinarily maintains its own profit and loss account which is ultimately taken to and incorporated in the head office books of account. In the present case also the assessee had himself returned the net and not the gross profit in speculation from his branch business. The net profit therefrom could only have been determined if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd exclusively for the purposes of such business, profession or vocation." In sub-clause (1) of section 10 the words used are " any business". When determining the profits of " any business " the expenditure wholly laid out for that business has to be allowed. " Any " does not necessarily mean one business. A person may have several businesses and though they will all be assessable under the head " business, profession or vocation" nevertheless the expense for each such business will have to be separately considered particularly if the loss or profit of each such business has to be separately treated for any purpose of this Act, even though the tax may ultimately be chargeable only on the totality of the profit and loss of the separate bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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