The question whether different ventures carried on by an individual or a company constitute the same business is a mixed question of law and fact.

Judgment

HIDAYATULLAH, J : These are two consolidated appeals by special leave. The first is directed against an order of the Income tax Appellate Tribunal, Calcutta Bench dated March 15, 1955, and the other, against an order of the Calcutta High Court dated April 27, 1956, declining to ask for a statement of the case under S. 66(2) of the Indian Income-tax Act.

2. The facts are as follows : Setabgunj Sugar Mills, Ltd., is the appellant. This Company was incorporated in 1934, and was established to take over some sugar mills run by a firm. Included in the objects for which the Company was established was the business of buyers, sellers and dealers in jute, gunnies, oil seeds, etc. For the first few years, the Company carried on the business of manufacture and sale of sugar only. In the accounting year ending August, 31, 1945, the Company had some transactions in gunnies and made a profit. In the next accounting year ending August 31, 1946, the Company made also a profit in transactions in gunnies and jute. In the accounting year ending August 31, 1947, (corresponding assessment year being 1948-49), the Company did business in mustard seeds, gunnies and hessian and made profit. After this assessment year, the Company ceased to have any business other than the manufacture and sale of sugar.

3. We are concerned with the assessment year 1948-49, corresponding to the accounting year ending August 31, 1947. In that year, the profits from the sale of gunnies, mustard and jute amounted to Rs. 6,14,018/-. Some of the business was done by purchases or sales in the territory now in Pakistan. During the same accounting year, the sugar business resulted in a loss of Rs. 2,09,306/-. The loss in sugar business was set off against the profits of the other businesses, and the Income-tax Officer by his order assessed the Company on an income of Rs. 4,04,712/-. The Company claimed to set off against this profit, business losses of back years in its business in sugar amounting to Rs. 13,43,069/- which had been brought forward from the previous year. The contention of the Company was that these losses were of the same business, and that S. 24 (2) of the Indian Income-tax Act applied. This contention was not accepted. On appeal to the Appellate Assistant Commissioner, the contention of the Company was accepted. The Commissioner of Income-tax then preferred an appeal before the Income-tax Appellate Tribunal (Calcutta Bench), which was allowed. The Tribunal gave reasons why the various activities of the Company could not be construed as the same business for the application of S. 24 (2)

4. The Company then asked the Tribunal to make a reference to the High Court on four questions of law which it stated, arose out of the Tribunal s order. The Tribunal declined to make a reference. The Company next moved the High Court under S. 66(2) of the Act for calling upon the Tribunal to state a case on the four questions, but its application was summarily dismissed. The Company has now, with special leave, appealed against the order of the Tribunal reversing the decision of the Appellate Assistant Commissioner and also against the order of the High Court declining to call for a statement of the case.

5. The question whether, on the application of the settled test, different ventures carried on by an individual or a company from the same business is a mixed question of law and fact. Certain principles are applied to determine whether on the facts found a legal inference can be drawn that the different ventures constitute separate business or viewed together, can be said to constitute the same business. These principles were stated by Rowlatt, J. in Scales v. George Thompson & Co. Ltd., (1927) 13 Tax Cas 83 at p. 89. The learned Judge observed.

"................... the real question is, was there any inter-connection, any interlacing any inter-dependence, any unity at all embracing those two businesses."

The learned Judge also observed that what one had to see was whethe