HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Ahmedabad v. Karamchand Premchand Ltd., Ahmedabad
Civil Appeal No. 304 of 1958
[1960] 3 SCR 727 ·
Business Profits Tax Act, 1947: sections 2(3), 4 and 5 third proviso
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. K. Das · J. L. Kapur · M. Hidayatullah
Assessment years: Chargeable periods April–December 1946, 1947, 1948 and January–March 1949
01 · Facts of the case
The assessee earned managing-agency profits in British India and incurred pharmaceutical business losses in Baroda. The Tribunal refused to offset those losses; the High Court permitted adjustment.
Source: Primary report: SCR 727–730
02 · Discussion by the Hon’ble Court
Section 5 included the Baroda business; its third proviso exempted income, profits and gains unless brought into India, without excluding the business itself. This differed from provisos excluding entire businesses. In that context the phrase did not encompass losses.
Source: Primary report: SCR 731–741
03 · Judicial decision
Losses of the Baroda business could be set off against the taxable business profits under the historical Business Profits Tax scheme. Capital-computation objections did not justify rewriting the provision.
Source: Primary report: SCR 739–742
04 · Outcome / in whose favour
The Revenue appeal was dismissed with costs.
Source: Primary report: SCR 742
05 · AKHB REVIEW POINT
Distinguish exclusion of a business from exemption of its income. This result depends on the precise third proviso and should not be generalised to loss from exempt income under other legislation.
Source: Primary report: SCR 733–742
Source & verification
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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