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TMI Blog1962 (1) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... hese two appeals as the assessee. The short facts giving rise to the two appeals are these. The assessee in Civil Appeal No. 429 of 1960 is a Hindu undivided family consisting of a father and his minor son. The assessee carried on business as a money lender and a dealer in shares in what was then known as British India. The assessee was also a partner in three non-resident firms carrying on business at Penang, Kuantan and Raub. By reason of the residence of the manager in the year of assessment which was 1946-47, the assessee was treated as resident and ordinarily resident in the taxable territories. In the course of the assessment proceedings, the assessee claimed that it had incurred a loss of Rs. 23,672 in the three foreign businesses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in favour of the assessee. In Civil Appeal No. 430 of 1960 the assessee, who was resident and ordinarily resident in the taxable territories, carried on a business in the manufacture and sale of " lungies " at Madras. In or about April, 1946, a similar business was started at Rangoon in Burma in which the assessee became a partner along with two other persons, the assessee's share being 9/16 only. The assessee was the capitalist partner, while the other two were working partners in-charge of the management of the business. The Rangoon firm suffered a loss and as no accounts were said to have been maintained, a statement of affairs as on December 31, 1946, of the Rangoon firm was taken and this, showed a loss of Rs. 43,969. The pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the High Court has correctly answered the two questions. It appears that in the High Court the point urged on behalf of the present appellant was that there was no identity between the unit which derived the income and the units which sustained the loss and on this ground it was urged that there could be no set off under section 10 which permitted the loss incurred by the same unit being set off against the profit derived by it; in other words, the argument was that under income-tax law when an individual or the karta of a Hindu undivided family was a partner in a firm, the unit of assessment in regard to the firm's profits or gains was the firm itself which was an entity separate and distinct from the partners composing it, notwiths ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so thereto which would favour the disintegration of the head " business ", it further pointed out that section 10 of the Indian Income-tax Act did not distinguish between business in British India and business in an Indian State or so divide business. The ratio of that decision must apply to the cases under our consideration and the assessees are entitled to set off losses which they had suffered in business outside the taxable territories against profits and gains made from business within the taxable territories. It is worthy of note that though the profits of each distinct business may have to be computed separately, the tax is chargeable under section 10, not on the separate income of every distinct business, but on the aggregate of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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