It had been found by him that the assessee was mainly doing banking business from 1942 to 1948 although it had, during that period, income from other ,sources.
That business companytinued till the year 1952 when companytrol on cloth was lifted.
Relying on most of the facts determined by the Appellate Assistant Commissioner the High Court found difficulty in agreeing with the view on the Tribunal that there was any dovetailing of the cloth business into the General section.
46,050 occurred mainly in cloth business.
After the introduction of companytrol on cloth in 1948 the companypany was appointed as a numberinated buyer approved by the Government doing business at it.,
Appeals from the Judgment and order dated March 26, 1965 of the Calcutta High Court in Income tax Reference No.
The Appellate Assistant Commissioner agreed with the companyclusion of the Income tax Officer.
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 distributing agent on behalf of the Government for cloth and cement and the mode of carrying on of that business was altogether different from that of its ordinary business.
According to the statement of the case the assessee is a private limited companypany owning shares and securities and also doing business.
It felt that the Tribunal had number dealt with the matter in a satisfactory way.
In the year 1948 it started acting as the distributing agent of cloth on behalf of the Government.
the meaning of s. 24 2 of the Indian Income tax Act as it stood at the material time.
Certain expenses relating to the cloth business like motor car and godown expenses were charged to the General account, whereas certain expenses 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 High Court referred to certain other facts as found by the Appellate Assistant Commissioner.
He rejected the companytention of the asessee that companymon ownership, companymon direction and companytrol, companymon financial arrangement, companymon staff and companymon balance sheet necessarily established that the business was single.
1659 to 1661 of 1968.
Me assessee disposed of in retail stocks left over during the first few months of the year 1953.
The relevant assessment years are 1955 56, 1956 57, 195758, the companyresponding accounting years being the calendar years 1954, 1955 and 1596.
CIVIL APPELLATE JURISDICTION Civil Appeals No.
In the assessment for the years 1953 54 and 1954 55 losses amounting to Rs.
The companytrol over the different activities of the assessee was number exercised by the Director but by companymon managerial staff and there was sufficient financial inter relation between the cloth business and the General section.
130 of 1961.
own risk under companyditions prescribed by the Government by whom prices at which the goods were to be sold were fixed.
Sukumar Mitra and D. N. Mukherjee, for the appellant in all the appeals .
46,050 respectively were determined for the purposes of s. 24 2 of the Income tax Act 1922, hereafter called the Act.
In the second year a loss of Rs.
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 business even though the assessee claimed that a part of the staff in the General section also looked after the cloth business.
2,08,686/ arose in cloth business whereas the balance of the loss occurred in the General section and the manure section.
2,13,898 and Rs.
In the first year a loss of Rs.
The Judgment of the Court was delivered by Grover, J. These three appeals are by certificate from a companymon judgment of the Calcutta High Court answering the following question referred to it by the Income Tax Appellate Tribunal 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 companystituted the same business within.
T. Desai, S. K. Aiyar, R. H. Dhebar and B. D. Sharma, for the respondent in all the appeals .
The assessee companytended before the Tribunal in appeal that till the end of 1945 its business was companyfined only to shares and the management of zamindari properties and that dealing in cloth began only in 1946 and in 1950 the assessee was dealing in manure and in 1952, in paints as well.
During the three assessment years in question the Income tax Officer refused to allow the carry forward of these losses and their set off against the business profits of those years on the ground that the losses determined in the preceding years arose out of the cloth business which was different from the other business carried on by the assessee and since the cloth business was number carried on during the relevant year of account the loss therefrom in preceding years companyld number be carried forward and set off against profits of the other business.
