COMMISSIONER OF INCOME-TAX,AHMEDABAD vs KARAMCHAND PREMCHAND LTD.,AHMEDABAD.

The Supreme Court interpreted the third proviso to Section 5 of the Business Profits Tax Act, 1947, determining that while the Act applies to businesses in Indian States, the losses from such businesses can be set off against profits from businesses in British India. The Court held that the third proviso only exempts income from the Baroda business when not received in British India, thus allowing the assessee to claim the loss for tax purposes. The appeal was decided in favor of the assessee, allowing the set-off of losses against profits.