Judgment

J. L. KAPUR J. : These two appeals by special leave raise a common question of law, and that is, whether business losses incurred in the erstwhile State of Cochin could, under the Income-tax Act of Travancore, be set off against the business profits made in the erstwhile State of Travancore. In Appeal No- 260/58 a further question arose whether in the case of that assessee the year ending June 30, 1949, was the previous year for the assessment year 1950-51 with the result that it should be assessed under the Indian Income-lax Act of 1922. But this question was not answered by the High Court which confined itself to answering the first question which was common to both the appeals. The appellant before us in both the appeals is the Commissioner of Income-tax and the respondents are the two assessees, in one case a Bank and the other a private limited company. The main argument has been confined to the question of applicability of S. 32(1) and the first proviso to that section of the Travancore Income-tax Act (hereinafter called the Travancore Act).

2. In C. A. No. 259/58 the assessee is a public limited company incorporated in the State of Cochin with branches in that State a