THE COMMISSIONER OF INCOME-TAX, BOMBAY CIRCLE II vs THE NATIONAL SYNDICATE, BOMBAY.

The Supreme Court held that under Section 10(2)(Vii) of the Indian Income Tax Act, 1922, losses incurred during the accounting year can be claimed as deductions even if the business was not carried on for the entire year. The Court clarified that the requirement is that the business must have been carried on at some point during the year, and losses from sales of machinery and plant can be accounted for if they occurred within the same accounting period. The High Court's ruling was upheld, allowing the deduction of losses from the sale of assets after the business closure.