9911796707
TMI Blog1975 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 1954-55 1,08,660 1957-58 2,86,171 -------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Rs. Business income in Madras Pictures (own business) 7,397 Share of profit from the registered firm of A.L.S. Productions 2,16,299 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -------- Balance loss 1,71,135 Share of profit earned by Smt. Alagammal (wife) from the Registered firm of A.L.S. Productions 2,16,298 &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1958-59 to the extent of approximately Rs. 45,000. There was, therefore, no loss to be carried forward for setting off in the assessment years 1959-60 and 1960-61. The department appealed against the order of the Appellate Assistant Commissioner for these years. The Tribunal held that the activity of carrying on the business of a firm cannot be split into the exact profit sharing ratio of the partners and that each partner carried on the business for the whole firm so that the share income from the firm including the wife's share income clubbed under section 16(3) in his hands, could be said to be profits of a business carried on by the assessee. In the view of the Tribunal, the expression " profits " under section 24(2)(ii) can mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows that the income earned by the wife retains its character as the income of the wife and is not converted into the income of the husband for all purposes. The inclusion of the income of the wife is only for the purpose of taxing it in the hands of the husband. The identity of the income of the wife is thus not lost. Section 24(1) provides for the set-off of losses against the assessee's income under any head. Section 24(2)(ii), to the extent material, runs as follows: " Where any assessee sustains a loss of profits or gains...... in any business.................. and the loss cannot be wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no other head of income, shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wholly belonged to him. In Dayalbhai Madhavji Vadera v. Commissioner of Income-tax [1966] 60 ITR 551 (Guj), the Gujarat High Court has held that " section 16(3) provides only for inclusions in the total income of an individual of the income of the wife or any other person and does not create a legal fiction whereby the income of another is deemed to be the income of the individual ". We agree, with respect, on this point. That was a case where the share of the wife in which the assessee was a partner disclosed a loss. The question was whether the loss could be included in the total income of the assessee, i.e., the husband. We are not concerned with the question as to whether the loss sustained by the wife could be adjusted against the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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