ANGLO-FRENCH TEXTILE CO., LTD. vs COMMISSIONER OF INCOME-TAX, MADRAS.

The Supreme Court held that under Section 24(2) of the Indian Income-tax Act, 1922, an assessee cannot carry forward a loss when there is no income to set it off against in that year, as required by Section 24(1). The Court further clarified that a set-off under Section 24(2) can only be claimed when the loss arises under one head and the profit against which it is sought to be set off arises under a different head. The appeal was dismissed, affirming the High Court's decision that the loss could not be recorded and carried forward.