Law: Income Tax Act (XI of 1922)

Section: 24 (2)

Income-tax Act (XI of 1922), S. 24 (2)-Loss from business of buying and selling wholesale textile goods-Set-off and carry forward-Not admissible against profit from textile "industry" Business, on facts, held, not same.   Scales v. George Thompson do Co. Ltd. 13 T C 83 rel.   Howden Boiler and Armaments Company Limited v. Steward 9 T C 205 and K. S. S. Soundrapandia Nadar & Brothers v. Com missioner of Income-tax, Madras 18 I T R 163 distinguished. JUDGMENT   FARUQUI, J.-The Income-tax Appellate Tribunal, Karachi has, under section 66 (1) of the Income-tax Act, referred the following question for the opinion of this Court   "Whether in the facts and circumstances of the case the finding of the Incometax Appellate Tribunal that the business of Messrs Haji Abdul Rahim Abdul Qayum in the years prior to 1954-55 and in the year 1954-55 were not the same within the meaning of the word under section 24 (2) based on any material or evidence?"   The material facts, as stated in the statement of the case, are these. The assessee is apartner in the firm of Messrs Haji Abdul Rahim Abdul Qayum ; the firm had branches at Peshawar, Lahore and Karachi. The relevant assessment year is 1954-55 corresponding to the account period ending on 31st March 1954. A loss of Rs. 20,310 was worked out for the assessment year/ 1953-54 while for the year following (195455) there was a profit of Rs. 99,212. The assessee carried on wholesale business in textile goods at all the three branches and also owned a polishing factory at Peshawar. The wholesale cloth concern at Karachi was closed down early in 1952 ; a textile mill set up at Karachi on the 25th April 1952 under the name of the "Qayum Textile Mill". No dealings in cloth at Karachi were card on during the assessment years 1953-54 and 1954-55 but, in this period the mill was being run ; only the goods manufactured were sold. The wholesale cloth shop at Lahore was closed own on the 31st August 1951 ; there was no income from cloth here either in the assessment year 1953-54 or 1954-55. The cloth shop and the tea polishing factory at Peshawar as well were wound up in the course of…