THE COMMISSIONER OF INCOME TAX, BANGALORE vs SRI J.H. GOTLA, YADAGIRI

The Supreme Court addressed the interpretation of Sections 16(3) and 24(2)(ii) of the Income Tax Act, 1922, and Section 64 of the Income Tax Act, 1961, regarding the set-off of losses incurred by an individual against the profits of his business and the share income of his wife and minor children. The Court held that the assessee, despite gifting part of his oil mill to his family, was deemed to be carrying on the business, allowing the set-off of losses against the income of his wife and children. The ruling emphasized the need for equitable construction of taxing statutes to avoid absurd results.