Commissioner Of Income-Tax vs Smt. Pana Devi And Ors. on 18 February, 1974
26. The second submission made by Mr. Lodha for the Revenue is that the second proviso to Section 24 (1) of the Act is an independent provision and, if it is so considered, a partner of an unregistered firm could not seek an adjustment of his share of loss in the unregistered firm against profits made in his individual business. He has mainly relied upon a decision of the Bombay High Court in Keshavlal Premchand v. Commissioner of Income-tax, Ahmedabad in which the first proviso to Section 24(1) was considered to be an independent provision. By a parity of reasoning, leraned Counsel submitted that if the first proviso to Section 24(1) could be considered as an independent provision, the second proviso should likewise be so considered and full effect should be given to the second proviso of Section 24(1) independently of the main enacting part of the aforesaid Sub-section. The submission made by the leraned Counsel is negatived by the very language employed in the second proviso to Section 24(1) wherein a reference has been made to ''any such loss" which can obviously mean the loss referred to in the main enacting part of Section 24 (1) of the Act. The use of the word "such" therefore in the second proviso is a clear pointer to the fact that the said proviso could not be read as an independent provision, but must be read as an exception to the main provisions of Sub-section (1) of Section 24. Moreover, the function of a proviso is to carve out an exception to the main enanctment and to exclude something which would otherwise have been within the scope of the main provision.