GOVINDRAM BROS LTD Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THIS is a reference under Section 66 (1) of the Indian Income-tax Act, and the question which we are asked, in our advisory capacity, to express an opinion upon, is whether, the loss which was incurred by the assessee company and which was attributable to speculation in silver, can he set off, in the following year, against the income, profits and gains in speculation in cotton, having regard to the provisions of Sub-section 24 (2) of the Indian Income-tax Act. That sub-section provides that such a set-off, in a subsequent year, can only be made against income, profits and gains from "the same business".

(2.) THE question as framed by the Tribunal "in the original case was : Whether, in the circumstances of the case, the assessee is entitled to set off the loss of Rs. 71,008 in silver speculation carried forward from the assessment for 1940-41 against the profits from speculation in New York cotton considered in the assessment for 1941-42, under Section 24 (2) of the Indian Income-tax Act, 1939 ? Section 24 (2.) is in these terms : Where any assessee sustains if loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 81st day of March 1940, under the head 'profits and gains of business, profession or vocation and the loss cannot be wholly set off under Sub-section (1), the premium not so set off shall be carried forward to the following year and set off against the profits and gains, if any, of the assessee from the same business, profession or vocation for that year. THEre follows a provision for a still further carry forward. THE material words, which are to be noted, are that it must be from '' the same business, profession or vocation".

(3.) IN that state of the record this matter came before us in October, 1944, and in referring the case back to the Tribunal my learned brother Kania, delivering the judgment of this Court on October 12, 1944, said: The question whether the business is the same, under Section 24 (2) is a question of fact. It is a conclusion to be drawn from various facts which are established from the records produced before the Tribunal. The question, which this Court can consider is whether any evidence exists for the conclusion of the Tribunal. Apart from that, the Tribunal being the final fact-finding authority, this Court cannot go into the question. From that aspect the two statements found in the statement of case appear to be conflicting. IN paragraph 8 it has stated: ' A part of the assessee's business is speculation in wheat, linseed, silver and cotton. ' Towards the "end of paragraph 5 it has stated : 'we held that speculation in silver, wheat and linseed and that in New York cotton were not the same business within the meaning of the section. ' It may be noted that at this stage also the Tribunal has omitted to notice the word 'cotton' in describing the nature of the business of the assessee, as it had first described.