PRODUCE EXCHANGE CORPORATION LTD. vs COMMISSIONER OF INCOME TAX

The Supreme Court ruled that under Section 24(2) of the Indian Income-tax Act, 1922, an assessee is entitled to set off a loss from share transactions against profits from other business activities if there is sufficient interconnection between the businesses. The Court established that common management, employees, and administration indicate that the businesses are interconnected, thus allowing the set off. The decision of the Income-tax Officer to disallow the claim was overturned, affirming the Appellate Tribunal's ruling in favor of the assessee.