JUDGMENT

CHANDRACHUD, CJI. :— The appellant which is a public limited company incorporated under the Indian Companies Act is authorised by its memorandum and articles of association to carry on business, inter alia, as importers, exporters and insurances agents.

2. We are concerned in these appeals with the assessment years 1954-55, 1955-56 and 1956-57 corresponding to the accounting years 1953, 1954 and 1955. the appellant used to carry on business in (i) general insurance, (ii) brokerage and commission, and (iii) import and sale of woollen fabrics, leather beltings, hardware, toilet goods, chemicals, cotton fabrics, etc. The business of import and sale was closed by the appellant towards the end of the calendar year 1952 corresponding to the assessment year 1953-54. In that year the appellant suffered an accumulated business loss of Rs. 56,488/-.

3. From the assessment year 1954-55, that is to say, from the commencement of the calendar year 1953, the appellant started exporting cotton textiles instead of importing woollen fabrics which, as stated earlier, it had ceased to do towards the end of the calendar year 1952. The appellant claimed that the loss of Rs. 56,488/- incurred by it on the import and sale of articles mentioned above should be set off against the profits made by it during the assessment year 1954-55, 1955-56 and 1956-57.

4. The Income-tax Officer and the Appellate Assistant Commissioner rejected the appellants claim on the ground that the business of importing and selling goods was distinct and separate from the business of exporting goods; and since the import business which the appellant was doing till the commencement of the assessment year 1953-54 and the export business which it commenced in the assessment year 1954-55 did not constitute the same business and as the business of import in which the loss was suffered was discontinued or did not exist in the assessment years 1954-55 to 1956-57, the unabsorbed loss on the assessment year 1953-54 could not be set off against the profits realised from the other business in subsequent years.

5. Instead of filing an appeal to the Income-tax Appellate Tribunal, the appellant filed revision applications to the Commissioner of I-T, against the order of the Appellate Assistant Commissioner, under S. 33A of the Income-tax Act, 1922. The revision applications were filed on June 15, 1960 but it was on Jan 18, 1972 that they were disposed of by the Commissioner, Bombay City- V, Bombay. The reason for the delay seems to be that the Commissioner was awaiting the decision of a case which, it seems, was ultimately withdrawn.

6. It was urged on behalf of the appellant before the Commissioner that the business of import and export was one and the same business as both activities involved purchase and sale of goods and that the place where the goods were purchased or sold would not make any material difference as far as the nature of business was concerned. In his order dated Jan. 19, 1972 the Commissioner observed that apparently this argument was well founded but a detailed scrutiny of the nature of the two businesses would show that the nature of the articles imported was entirely different from the nature of the articles exported and the procedure involved in the import and export of articles was also entirely different. The Commissioner found that whereas until the commencement of the assessment year 1954-55 the appellant was dealing in woollen fabrics and other articles, it started dealing in cotton textiles only with effect from the assessment year 1954- 55. Relying upon a Judgment of the Calcutta High Court in Shree Ramesh Cotton Mills Ltd., v C. I. T. Calcutta (1967) 64 ITR 317 (Cal) the Commissioner held that the business of import of certain articles in one year and the export of other articles in other years were not dovetailed into one another and there was no inseparable link between the two activities. The fact that the same capital and the same management looked aft