During the course of assessment proceedings, the Assessing Officer (AO) observed from the computation of total income that the assessee clubbed loss from the business of his spouse amounting to Rs.31,56,429/- in view of the provisions of section 64 of the Income-tax Act, 1961 (hereinafter called 'the Act'). On being called upon to justify such a claim, the assessee submitted that during the year under consideration he gifted a sum of Rs.94.50 lakh to Mrs. Priti Bhaskarwar, his wife, who started business of Futures and Options (F&O) on 18-09-2013. The assessee claimed that she incurred loss of Rs.31,56,429/- in such business, which was clubbed in his hands. The AO accepted the primary claim of the assessee of his wife having incurred loss of Rs.31.56 lakh in the business of F&O, which was set up on 18-09-2013 and further that loss from such business was eligible for set off against the income of the assessee in terms of section 64(1)(iv) read with Explanation 3 thereto. He, however, did not accept the assessee's contention that the entire loss of Rs.31.56 lakh be set off against the assessee's income.