Hoogly Trust (Private) Ltd v. Commissioner Of Income-Tax, West Bengal And Andaman And Nicobar Islands

HOOGLY TRUSf (PRIVATE) LID. v. COMMis.SIONER OF INCOME-TAX, WEST BENGAL AND ANDAMAN AND NICOBAR ISLANDS February 4, 1969 (J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] rncome-tax Act (11 of 1922), s. 24(2) (before its amendment by the Finance Act of 1955)-Business in several commodities--Lcss in one-Set off claimed against profits in others--QuesUon of fact-When High Court can examine its correctness. The asses.see carried on. business· in several commodities including cloth. In tlie assessment years 1953-54 and 1954-55 the assessee suffered loss in cloth business, and it was determined for the purposes of s. 24(2) of the Income-tax Act, 1922 (as it stood before the amendment in 1955). During the subsequent three assessment years, the Income-tax Officer refused to allow the carry forward of these losses and their set off against the busi-ness profits of th°"" years on the ground that the losses determined in the D preceding years arose out of the cloth business which was different from the other business carried on by the assessee. He held that since the cloth business was not carried on during the relevant year of account the loss therefrom in preceding years could not be carried 'forward and set off against profits o( other business. The Appellate Assistant Commissioner agreed with the Income-tax Officer. The Tribunal found (i) that the asscssce's dealings in cloth started very early and the introduction of con-trol only changed the prooedure of carrying on the business, (ii) that the assessee has been doing business in several commodities and its trad-ing in each commodity did not constitute separate business, (iii) that the cloth business never assumed the proportion or the stature of a distinct and separate business and (iv) that there was evidence to show dovetail-ing of cloth business into the general section. The question, as to whether on the facts and in the circumstances of the case, the cloth business and the business j.n the general section constituted the same business within the meaning elf s. 24(2) as it stood then, was referred to the High Court. Relying on most of the facts determined by the Appellate Assistant Com-missioner, the High Court answered the question against the asse>See. In appeal, to this Court, the assessee contended that (i) the findings on ques-tions of fact given by the Tribunal were final and it was not open to the High Court to examine their ccrrectness in the absence · of any proper question on the point; and (ii) on the findings of the Tribunal the losses on account of cloth business were liable in law to be carried forward and set off against the profits during the relevant assessment years. HELD : The question must be answered in the affirmative and in favour of the assessee. (i) In spite of the form in which the question had been referred it was not open to the High Court to examine the correctness of the conclmioos of the Tribunal on facts. If the Tribunal does not consider the evidence covering all the matters and bases its findings upon some evidence only ignoring other essential material that would amount to a misdirection in law and the findings would give rise to a qu.,.,tion liable to be referred to the High .Court. But it is equally well settled that if the question about the validity of the findings of fact is sought to be raised for one reason or 7giet gee (Teac) fafaes HUST Hae, Uaat ITH TIT HvSHTA— ae fratare gto||[Hoogly Trust (Private) Ltd..- Commissionerof Income-tax, West Bengal and Andaman and7Nicobar Islands]___||(4 weaet, 1969) (ato Ho ato ag, ato taeaTelt HITYo Uo Faz) THT Sag Paz, 1922 (1922 #T 11), amet 24 (2) (1955 % faa afafian are dates & ga) —ote vega ot ereare—om azar% gta ara & oral & gat at arat—aeq atSVT ATMA FA TART YSaT Bt Tart He aaa F ? fratfeat aos afea ate aegeit ar areart war ter aT| fratzar fratzar ag(1953-54 ate 1954-55. 4 fratfedt at aos & areare & arf ge ate ag aaaema tae, 1922 (aa fHag 1955 Faatete ge at) st ater 24(2) %Sats a far aaarfta at recearqadt dia fratem aaheter aaaaifmac % at ara at at & mA ae a aah e arate® ara & saatFAT HWA BH AYA A ATATT TT ATs are He fearfae qsadt ast ¥maT erat Hs FH Hreare & es of, Tt fratfet aver ware sy ay aaarcane & feet So1 aTaHe afar FT ag afafasifes fear fe vfs aos arPRATT Gara Hear ag F tera al Taraa tar ar zafae vas gd aut FHaft ge at saat ont dt & ora at aewar aK wea araTe He ant A saagare ae fear ar amar1 adhe agrae arg A orHx feat & sents waetafser a ag faoad Frater g: (i) fe fratfedt } wag ar area aga | fratzar fratzar ag se YS et Tat ar ate fraeam aaa A Hae Hct H Tara aT afar Aqfeacat at war ar,(ii) fe fratfeat aaa aeqat A Heart HT LET AT AIT azUm ae F GAH SaTITT A JaH-gay areare afsa sat Vtat at, (iii) fH sas srHATE HAT Wl aH ghreq We gH Treat eaeq ar efaaa aal WT Tar, Ah(iv) ag efaa Hea & fare ter area sigeg fe aosFH arare a ATAALA F HIATT H TYfaa fear aay ar) seq arava ay fatzce frat war arfe aor ara & cent att ofefeafeat F agarx as aT areare BIT aTATRTTaga F BATT A aU 24(2) %, set ag va aaa ft, sateata wa aBITAR TST SarFl atia aerasaysare aazarhea aga Bacal at qaTeTMHC FOI FATATAT A ae yer Hr Tat fratfedt H faes fear sa rararar Fimite Het ot faatfedt a ae actter A fe (i) afraee arr gear F seat aefrare au frat afar tak sea araraa va arafeet ofaa wer ®ama H saat Yaar al Tear asl HI THAT g, Ae (ii) afew F fasnatBAG BIS H BIT F HUT ge efsat fate at shee H arr a wryaT aadt § wt BATT war awhchow et areata saat ga fear aanal|| afataatita—sat BT Tat Tareas wT FH ate fratfedt H ger F fearaTaT atfer|ee| _ (i) fara rare set faface fot ae 2 gah arage wt aoa eararetdeat F araTe ax faa F facwgl st year at oder Hx aware1 saara Te ANE faare wet Pear ot aaat featsafar at feat a arahae areax faare adh erat 2 ate afe ag woat frome ea araegH araat ster eTHAT HH Aer Te farsa g at ae fatwt efse F aafte (misdirections)at atfe Homand ate faeast & at oer set dat az seq cara efafase feu ara atea aat fara ag at uw afeaxt ata 2 fe ate feet wm aTwey BTU Se aeat Fe rae ae fata aU fasaut atfafeqreaar ae at FBTS TET HLA BT MATA fear STH gat sa fasanh ot mag et ae afer eT freer HT BT TATA Gs gasfe seq eqrarag ® ana oa feast gz freer HT BT TATA Gs gasfe seq eqrarag ® ana oa feast gz HT BT TATA Gs gasfe seq eqrarag ® ana oa feast gz BT TATA Gs gasfe seq eqrarag ® ana oa feast gz TATA Gs gasfe seq eqrarag ® ana oa feast gz Gs gasfe seq eqrarag ® ana oa feast gz gasfe seq eqrarag ® ana oa feast gzfe seq eqrarag ® ana oa feast gz seq eqrarag ® ana oa feast gz eqrarag ® ana oa feast gz ® ana oa feast gz ana oa feast gz oa feast gz feast gz gzara fear ot ae, cet feat star aria | afreceramet ate dar saevat fear ar ar fe feat te oer at fafee fear are atx ofaa sethyaa FH seq araragoafsraea are frat ae faenat e afsata F atawala Bg H fey eflare TA HC AHATAT Ble a7 gt Teat F ATAT yzcau farce freprer THAT AT | tar sete tat @ fe ufsacar a va aAeT ateq Meet eT freer HT BT TATA Gs gasfe seq eqrarag ® ana oa feast gz freer HT BT TATA Gs gasfe seq eqrarag ® ana oa feast gz HT BT TATA Gs gasfe seq eqrarag ® ana oa feast gz BT TATA Gs gasfe seq eqrarag ® ana oa feast gz TATA Gs gasfe seq eqrarag ® ana oa feast gz Gs gasfe seq eqrarag ® ana oa feast gz gasfe seq eqrarag ® ana oa feast gzfe seq eqrarag ® ana oa feast gz seq eqrarag ® ana oa feast gz eqrarag ® ana oa feast gz ® ana oa feast gz ana oa feast gz oa feast gz feast gz gz aeeee another, reference of a proper question' challenging those findings must first be sought before those findings can l)e challenged before the High Court. No attempt was made before the Tribunal to have any such question re-ferred and in the absence of a proper question it was not open to the High Cowt to accept· the findings of the Appellate Assistant Commissioner in preference to those given by the Tribunal or to come to any independent conclusion itself on the facts. The Tribunal does not appear to have di<-cussed the entire evidenee on which the findings were based but the order of the Appellate Assistant Commissioner and his findings as also the entire record were before it and there is nothing to suggest that all the material 'facts were not present to its mind except that they are not mentioned in detail. Its findings, therefore. must be accepted as final and the only question which it was open to the High Court to examine was whether the cloth business could be regarded as the same business within the meaning of s. 24(2) of the Act. [563 B-D; 563 G] India Cement Ltd. v. Commissioner of Income-tax, Madras, 60 I.T.R. 52, 64 and Hazarar Pir Mahomed Shah Saheb Roza Committee v. Com-missioner of Income-tax, Gujarat, 63 I.T.R. 490, 496, referred to. (ii) The question whether on the application of the settled tests dilfe-rent ventures carried on by the assessee from the same business for the purpose cif •. 24(2) is a mixed question of law and fact The fair test is whether there was any inter-connection, any inter-lacing, any inter-depen-dence, any unity were found to exist by virtue of the common m~ge­ment, common business organisation, common administration, common fund and common place of business. [564 D-E] Setabganj Sugar Mills Ltd. v. Commissioner 'of Income-tax, Central. Calcutta, 41 I.T.R. 272, 274, Scale! v. George Thomp,Pn &Co. Ltd., [19271 13 T.C. 83; Manila/ Dahyabhai v. Commissioner of Income-tax, Bombay City, 37 l.T.R. 398 and Commissioner of Income-tax,· Madras v. Prithvi Insurance Co. Ltd. 63 I.T.R. 632, 637, refetred to. Applying these principles the conclusions which the Tribunal arri•ed at were correct. CIVIL APPELLATE JURISDICTION : Civil Appeals No. 1659 to 1661 of 1968. Appeals from the Judgment and order dated March 26, 1965 of the Calcutta High Court in Income-tax Reference No. 130 of 1961. Sukumar Mitra and D. N. Mukherjee, for the appellant (in all the appeals). S. T. Desai, S. K. Aiyar, R. H. Dhebar and B. D. Sharma, for the respondent (in all the appeals). The Judgment of the Court was delivered by Grover, J. These three appeals are by certificate from a com-mon judgment of the Calcutta High Court answering .the f?llow-ing question referred to it by the Income Ta'I: Appellate Tnbunal in the negative and against the assessee : "Whether on the facts and in the circumstances of the case, the cloth business of the assessee and its business in the General Section constituted the ~rune business A within the meaning of s. 24(2) of the Indian Income-tax Act as it stood at the material time." aeeee at faarefanet vat frat ar far oe fread ararfea & freq atta agesATGaT BT TAT TT TAH faoat aa quer afwate wl saw amet F ate detfaataale ata val & free ag car aerar at fe at ara ava yak emaFt ct gaa fa saat fara & seta vet fear vat| Wa: sas faomat ayafar facay & eq tt ettare fea aTat ater ate faa get Ht Gea eaaTaTquel BL BHAT AT qe ae @ fH azar aay F areare aT az a ore 24(2)¥ atratat cH gt BATT ATT AT aaa a 4stesar atte fofates aire sree aigae, ata (India Cement Ltd.. v. Commissioner of Income-tax, Madras), 60 HTo zo HIKo 52,64 4Ieewea AT HigeaT ag aa Mat eet aay met aaa, TATA~of(Hazarat Income-tax, Pir Mahomed Gujarat), Shah 63 HTEo Saheb Fo Roza Aito Committee 490, 496 fafasr v. Commissioner fau mT|(ii) ae wer feaor gfeat watfedt B® any far aT at faatfedt arewae ST are fara-fard aay aren 24(2) ¥ sats % far UH gt ATTA4eT ATT eta @, fafe atc acm at ws fafaa sere1) ay TATA (fair test)ag 8 fr aa om at wary, uw at areare daa, oH et saraa, oe et fate‘at Un et areare H cart R aratx aw Hes TReTe rae, HIE TTT ATTale TIT fazar I< UHaT 3 att ¥ ae war wat at fe X faaata z| wa ftareal at any ach ofrecer § ot fread frarar az wat Aaa aa gat faca fafade ama maat aaa, Fala FaATET(Setabganj Sugar Mills Ltd.v. Commissioner of Income-tax,CentralCalcutta), 41 ao Zto TXo 272, 274; eee TATA ot Pea ws meatfafaes (Scales v. George Thompson & Co. Ltd.), (1927) 13 ato ato 83;aia TINE TATA ATTHT aTgaa, graf met (Manilal Dahyabhai v.Commissioner of Income-tax, Bombay City,) 37 WTgo zlo WI<o 398 azART WAR, ARTA TATA gat geaattea grad} fafats (CommissionerofIncome-tax,Madras v. PrithviInsurance Co.Ltd.}, 63 AT&o to WI<o632, 637; fafase few aT|,| fafan wate afaarftat: 1968 at do 1659 & Bex 1661 ate fates wate | 196{ % Ho 130 art wraHt fade A waHTT Gea caTaTAT H ard26 ard, 1965 are faut wiz arte R fares whe|| [1970] 1 Bao fro Fo os arerrelf at sir wast agmt fiat diegto Udo Fait|| (att aratet #7) seme at site & at site & site & &wast Wao eoFas, Who HoWAX, a)||Alto CHo SAT HIT alo Sto TAT—sarataa art fata rararfasfas To Uo WaT AF fear | (at attet a) ararfaafa ee a dia ae see. Rat aaa sea aaa Rew & facia B faag at erh 21 ver fret F ora arte afer ara fates fareafefadWIT IL BAHU. Gea ealaTas a aTHreeaH ate faaifeat F faes yarfear atta caay aaa F aval ate afefeafaal & gare faaifedt ar agwyHACATL BAC TAH AAV ATU A Hears efvers eeHy aTtae Ht arer 24(2) , wet fe ag atfan waraeat, aaieniaua at Hreare afsa statg 2?” |ana a feu ae faacat & aqare fraifedt ca siete fafate aed& Ht at are sfryfaat at carat & ate arcane WY edt 21 genet fateat 1955-56, 1956-57, 1957-58& Wt aaa Far aes Aq 1954, 1955 AzAIT1956 46,050 #1 1953-54 waa at ate etfaat 1954-55 eewa Sra ant & Tac, fra 1922a (frat A BAT: gad gah 2,13,898 TeaTE sa ‘Tae’|Hel TAT S) Bl ATT 24(2) agaiaal & far aaarfea at rg Ht gam ae FH AasH PAT F 2,08,686 waa At ate ge sa fH ae ath arareq agaTTote SaTH TAIT A es1 fetta ag 46,050 wat alatft qera: ansareant & 81 seana dia fratem sat & eters atest orfsaz A ae arfrata arte me at ate stasharea & anit F sae gar eat atWGA Fe AST TAA ae gare He fear fe qaadt ay a acerca |arfarataay ® mreae a geat, a fratfedl sre aay wre ate ara ATLATT afret 2 dfa eqs BT HIATT Gara Hat ay F staat wel TAIT GT TET ar,safaa gaa oe aah A at aft eg, vaat art ad & oa ar gwar axwey aTTare & aasaa BAT al fear ar aKa| aT aerae TERTa arate gifs ® front 8aagnfa sae ati saa faaifedd at ga eteral aTaat et feat fe oe a earfea, om at free ae frau, oH & According to the statement of the case the assessee is a private limited company owning shares and securities and also doing busi-ness. The relevant assessment years are 1955-56, 1956-57, 1957-8 58, the corresponding accounting years being the calendar years 1954, 1955 and 1596. In the assessment for the years 1953-54 and 1954-55 losses amounting to Rs. 2,13,898 and Rs. 46,050 respectively were determined for the purposes of s. 24(2) of the Income tax Act 1922, hereafter called the "Act''. In the first year a loss of Rs. 2,08,686/- arose in cloth business whereas the balance of the loss occurred in the General section and the manure c section. In the second year a loss of Rs. 46,050 occurred main-ly in cloth business. During the three assessment years in ques-tio~ the Income tax Officer refused to allow the carry forward of these losses and their set off against the busines~ profits of those years on the ground that the losses determined in the preceding yea-TS arose out of the cloth business which was different from the D other business carried on by the assessee'and since the cloth busi-ness was not carried on during the relevant year of accoljllt the loss therefrom in pre.;eding years could not be carried forward and set off against profits of the other business. The Appellate Assis-tant Commissioner agreed with the cr , 'usion of the Income tax Officer. He rejected the contention of the asessee that common E ownership, common direction and control. common financial arrangement, common staff and common balance sheet necessa-rily established that the business was single. He took the view that the character of the cloth business carried on by the assessee was entirely different from the other business. He laid particular emphasis on the fact that the assessee acted as a dhtributing agent on behalf of the Government for cloth and cement and the mode F of carrying on of that business was altogether different from that of its ordinary business. He referred to the fact that the cloth business had a separate overdraft account with the Bank with which stocks of cloth had been pledged and there was separate staff for the cloth busjness even though the assessee claimed that a part of the staff in the General section also looked after the cloth G business. The assessee contended before the Tribunal in aopeal that till the end of 1945 its business was confined only to shares and the management of zamindari properties and that dealin!( in cloth began only in 1946 and in 1950 the a'sessee was droling in manure and in 1952, in paints as well. After the introrluction of control on cloth in 1948 the company was appointed a~ a nomi-H nated buyer approved bv the Government doing busine<s at ji, own risk under conditions prescribed by the Government bv whom prices at which the goods were to be sold were fixed. C'ertain expenses relating to the cloth business like motor car and godown . 560 SUPREME COURT REPORTS facta sara, oH gf tartare atx am A gaat a maw eq aae foe date fe areare Uae aTaTT aT | at ae eftest waafr fratfeat arer aed WTA are HIS He Hae Hl eaET Meg sae Ffacger fart ar. gat ga aa oefafase oie fear fe fastfedt 3TANT FT AIT A HIS ate Hie Ffrre afewal F war FH ars far at ateST BATT HT AAT HT TT Tah aa Heart HF sa F faega frst ar|wat ga cea} oft fade feat fe aadFB ara arya ae % aava gaa afafaad (sacs) tar ar, faa ore ease crm firedd <aES Ta Hay F areas F fae qaR whardrars ar, waft, fratfedt F azarat fearg fe area aga ae wearers Fa gq adard wy FTRATES BT MT Sate HTT 81 fraifedd Fada AF ofeach aaa az+ cette ay fr 1945 Fora ae sear ara Fan sat ate oat arcfialH Taeer oH et afte ar site ag fe aad ar areart Bae aq 1946 F areafear war ar ait 1950 % fratfedt waza wr areae He VET TT TAT1952ar atay 1948 F aed ax Prayant} eat aeaeT ATHT SITagatiag aafatace Fateer FH faa A ae ohae arch Tea aTfafea wat & aeitt aaa afar oe tat Haat ae wreare He TT ATae are fort alae oe aT Tar araad aeare are faa at ort hyRIS aT RT A aggag de Mecca Wen Fag aeTTT tat & cafes fee ae a se fe oe apa F wafer gqamy oe rem Asate ware, wos F Gar B carfea fae ae Twa feaera Ble feet oe fart at arafer at we et1 Fraifedt afaer-faerFerrera o¢ frera frou ar sat wat Heat at, afer saat watt oFat carrera maraaee are fear erat at aaT ws Harare ate aaaaga & ata cater faite ceercaraea atafrace Fag afafratiea fearfe fraifet Saag } atere aq 1946 8 grew a aeFT ae aHata faaraa ant & easarcane F gars at ofear Hofeadatst warat at ae at oar war fe fratfedt wee are wa ater aegt ® araHR ACTA BT PILATE HT VET aT AT. BH aea F Mea fe BISFH grearx& far ue gaR ary AIT SATA AAT FATT TAT aT a etMa at Afrat ae Tat aaa et fe Has F arate Foun ghar a TAH HTATE FTATA AT ASTR WeM Be fear sy aagare ag afafasiter feet TAT AT fr||HISHT Horace fratfet ster Tare Hy are TH st HCaTT HT UH MayaT at att Tae st etfs gst Ba dee Ht ara 24(2) Fatwa F facgrad srcare & ata arett afte wT a geR al fear a aT "Hee seman earares fain ofa[1970]1 Ho fae To seq eTA ey va wer seat B ofa wt fade fear a aIwean A Aa F1 Ada aeran argaa A ae ora fH faatfedtaq 1942 % Sax 1948aH Gena: aaare sreare FCETATqaft,saat sa ararafe &chert wea atal & wl wa gealaa1948 H faatfedt a acare at mit a ams F faacaafanatFeqard wear aera at fearqs PTT AT 1952 aH Baarvat wa fa wos aefraeam gor fay war artfaaifedl+ at ey ers| ar aay 1953 % WAH EG arat 3 aaa H aaa ae featgerard faatfedt|araren ead & ara seem H argomlerc fae aval 21 tar sea eqraraa sea aaa A ae aqua aoa fear ae fa afrac TaAT 3%aa faye qt aATaTade eT a faare at fra el sea eqaTay TUR WTane A fee qe awfafasaa aeofa facafear isa amy Fa7maraa ag afafeaifer fear at fe ag cat are & fw feazar feetfratfedt ar arcare at farr-faet adh Hoom et a, gey fare aaaaf arcart at eaeg aware ait ag. feasvatt aarararate1 Fat Fafare fir faerifedt ar arcane fafaer sare Ht aeguit & adtere wea are safea.® aaa ar, ae adh wer at amar fe arer 24(2) F sata H fae: gaat saatum gt arzart ar, wa fae cae featearat ar cH APT aATeT Vt TAT aT| ATTAagae wgetster Maas wfsHat qeat HT AaAraT HCA ET Gea gTATAT+ afaaee & ga afeata & arg agai sae aut Hope afore agua atfe arare: wpary Hy H HVAT BT BIE THAT aT| TTsaTaray av wean STF As FAI—||| |ceaTa wa A(1) atte afeecer are amar war agama afaraGt H eat aren wrazaen Tat aT, AIe(2) fH HIS HT BTLATE FA ATH aa eu at fe caat ar frost F ge cere area oT, fraifedtAAT ATUAT H Bae B fart BTA AToe wT TIT SMe aaa feu ae gs, vara fafreaa weaaH fae ae waws@ fe tae & gana saaeal ar vera feat ate) are6 A are,aTat AIXafuarat & og ales fecau é, Wt areata vag ATgat a ator wes“Profits and gains of business, profession or vocation’ (#T<aTX, afaat qaqa4reRX artate afsars)oi are 108 fraifedt are ware SA ara BTRATE,afer ar sqaarr Fara} we HC aT gy are 24(1)FX ag yaatad& fe wet ate frstfeat TET 6 4 afar scat& fret ttre F ata featag & fac arat ar afvarat atarfa gorar2%agi ag sa ag 4 fatwey weaaa aTdt ara, arat ar afwarat & sa att hl UH wT expenses were charged to the General account, whereas certain expenoes relating to the General section like rent and telephone charges were charged to the cloth account while audit fees were allocated to a different department. The control over the diffe-rent activities of the assessee was not exercised by the Director but by common mana7erial staff and there was sufficient financial inter-relation between the cloth business and the General section. The Tribunal held that the assessee's dealings in cloth started as early as 1946 and that the introduction of control by the Govern-ment changed the procedure of carrying on the business. It was further found that the assessee had been doing business in several commodities one after the other or along with the other and apart from the fact that a separate profit and trading account was main-tained for cloth business there was nothing to suggest that the cloth business assumed the proportion or the stature of a distinct and separate business. It was accordingly held that the transac-tions in cloth were part and parcel of a single business carried on by the assessee and the loss therefrom could not be segregated as a loss from a distinct business for the purpose of s. 24(2) of the Act. The High Court referred to certain other facts as found by the Appellate Assistant Commissioner. It had been found by him that the assessee was mainly dolJ11 banking business from 1942 to 1948 although it had, during that period, income from other sources. In the year 1948 it started acting as the distributing agent of cloth on behalf of the Government. That business con-tinued till the year 1952 when control on cloth was lifted. The assessee disposed of in retail stocks left over during the first few months of the year 1953. Thereafter the assessee ceased to have any dealings in cloth. The High Court quoted extensively from the order of the Appellate Assistant Commissioner. It felt that the Tribunal had not dealt with the matter in a satisfactory way. Reference was made to its own decision in another case in which it had been held by the High Court that in order to find out whe-ther the business of an assessee was the same in two different years the . prin1ary consideration was the nature of the business and the way it was conducted. Merely because the assessee's business was one of a dealer in several kinds of commodities it could not be said that it has only one business for the purpose of s. 24(2) when a part of its activities had come to an end. Relying on most of the facts determined by the Appellate Assistant Commissioner the High Court found difficulty in agreeing with the view on the Tri-bunal that there was any dovetailing of the cloth business into the General section. This is what the High Court said finally : "In our opinion, (i) that the inference drawn by the appellate tribunal was not warranted by the facts on re-cord and (2) that the cloth business was separate from A the assessee's business in general section notwithstanding that there was some interconnection of expenses or control." In order to decide the points raised before us it is necessary first to refer to the relevant provisions of the Act. Section 6 gives six heads of income profits and gains which shall be chargeable to B income tax. Out of these the fourth head is "profits and gains of business, profession or vocation". Section 10 taxes the profits of business, profession or vocation carried on by the assessee. Sec· tion 24(1) provides that where any assessee sustains a loss of profits or gains for any year under any of the heads mentioned in s. 6, he shall be entitled to have the amount of the loss set off against his c income profits or gains under any other head in that year. It is unnecessary to refer to the proviso and the Explanations). Prior to its amendment by the Finance Act 1955, sub-s. (2) of s. 24 ran as follows :- gareeFS fat gears Alar | (Teas ae eater a ws ea TCmrararaatArel 8)i faa afafrra,1955 are eater Hogs ae 24 atSTAT (2) Fa wae Ht|. RK) Where any assessee sustains a loss of profits or gainsin any year being a previous year not earlier than the previousyear for the assessmentfor the year ending on the 31st day of_March, 1940, in any business, profession or vocation, and the losscannot be wholly set off under sub-section (1), so much of the lossas is not so set off or the whole loss where the assessee had no otherhead of income shall be carried forward to the following year andset off against the profits and gains, if any, of the assessee from thesame business, profession or vocation of that year x x x x” are 24 BY saeare (2) 1955 ¥ faa afafros et mer i6: aren sfaemfiaBL TE ATSATS satay & fare arfers ar ea gaTT 2_ ~ **(2) Where any assessee snstains a loss of profits or gains inanyyear,beinga previousyearnotearlierthanthepreviousyear~ fortheassessmentfortheyearendingon the3lst day of March, 1940, in any business,professionor vocation,feet Hag and ga ware the loss Bt ana cannot 2 be wholly set off under| sub-s.(1), a“(2) wai arg fraffedt fad te ada, Wd aes, stew|aT31 RES, Ara, 1940 Fret at areare, area aftatt arat ar exaarr at & fare & Fratea arat at atestae aga ae at & seat arfSorat FAT se att wT Trae (1)ata gaia: yee aat fearMT HIT Tat Tot arf HY. fray wr qaer aat fear war fat Hee—Rrerifectt & ove are at at oer site adt8, azi arqay etfs ay artat FH art t sar area ae va agfratfedt & get arzarz, afaraT rarary e sta att aT ae afwaral &, afe wg a, yore fearSTRTT x x xxl’.| *tosetare frat fadt te af &, st qa ag %, sic at31 ard, 1940at mara Qa ard ad Mae Frater at} gd ae Aedt at Tal 2, fret areare, afe at eaaara F arat ar afwarat atifr sora gate ve aft ar saarer (1)¥ ae gata: gare aafear at aeat, aet Saal erft at foraet ar gre set fat var Y, aT Tet so much ofthe loss as is not set off or the whole loss where theassessee had no other head of income shall be carried forwardto the following year; andoe (ii) Where the loss was sustained by him in any other business,profession or vocation,it shall be set off against the profits andgains, if any, ofany business, profession or vocation carried on byhim in that year ; provided that the business, profession or vocationin which the loss was originally sustained continuedto be carriedon by him in that year ; anda (iii) aanx|x? gart ama si aa fear var 2 ag ga aren oe fear rar & fx oa farar fafaraa gaara (2) %, tat fis ag 1955 H adetar } gt st, weit fiverarat 31 aitateti-fratfedt at ate & at ger eft Awea A gare atBi sama: ag cette dt ad 2 fe afracer are oer B seat oz Para ae fromeofan & ae sea aaa sa aa H feat faa cet F ara F saat Yasarat otear aa we aaa 21 gad eater. ce a ae 3 fe afeac & favast >ANC, HIS F Hrcare F HITT gs ahaat fafa st aise F at st ae aTaadt Sate gaia Bat act & ctera gq erat & sae gore fat oT waaG1 gan wit weal H arse A ae Her fH Tea cararay afswra H faonsyat aster atte aged & fasrayh at fans 2 awat & aaife afsacer + ateroar reat ae aarex ate fadina orem ox faare ac aot faoad fare 3areata ug sale fe afsace a fafaraa fafa at afse & fafrerrwet& Ae Sea AaTAT A Ags Sta St afufaaifea