Law:

Section:

Section 72 of the Income-tax Act, 1961 [Corresponding to section 24(2) of the Indian Income-tax Act, 1922] – Losses – Carry forward and set off of business losses – Assessment years 1954-55 to 1956-57 – Whether test to determine whether two business constitute same business, is unity of control and not nature of two lines of business – Held, yes – Business of import of wollen goods carried on by assessee-company was stopped due to losses during assessment year 1953-54 – From assessment year 1954-55, it carried on business of exporting of cotton textiles and earned profits – There was common control and common management of same board of directors of business of import and export – Whether on facts, it could be said that there was dovetailing or interlacing between business of import and business of export carried on by assessee and that they constituted same business – Held, yes – Whether, therefore, assessee was entitled to set off of losses incurred on import of goods against profits made on export – Held, yes FACTS The business of import and sale of wollen fabrics carried on by the appellant/assessee-company was closed down towards the end of calendar year 1952 as the appellant suffered loss in that business. From the assessment year 1954-55, the appellant started exporting cotton textiles. The appellant claimed that the loss incurred by it on the import and sale of wollen fabrics should be set off against the profits made by it in export business during the assessment years 1954-55, 1955-56 and 1956-57. The ITO and the AAC rejected the appellant's claim on the ground that the business of importing and selling goods was distinct and separate from the business of exporting goods; 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 of the assessment year 1953-54 could not be set off against the profits realised from the other business in subsequent years. The revision application filed before the Commissioner was also rejected. On appeal to the Supreme Court : HELD Under section 24(2) of the Act of 1922, an unabsorbed loss could be carried forward to be…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492