Law:

Section:

Income-tax----Loss---Carry forward and set off-Business---Same business or separate business---To constitute same business there should be existence of inter¬connection, inter-lacing, inter-dependence or unity between two or more businesses ---Assessee-company engaged in flattening of wires supplied by K. Co---Assessee taking up premises of K. Co. on lease and installing its own machinery therein---K Co. closed down and assessee unable to get job work from K Co. or remove machinery from premises of K Co.---Assessee deriving income by sale of M.S. wires and sodalime---Unity of control established as same person had carried on job work of flattening of wires and trading in purchase of sodalime, M.S. wires, etc.---Loss of earlier years can be carried forward and set of in relevant year---Indian Income Tax Act 1961, S.72. In order to get the benefit of set off or carry forward of business loss of earlier years against the income of the relevant year, the business must be carried on and such business must be of such nature which has been carried on by the assessee. Before two or more businesses can be considered to be the "same business", they should not be easily separable and there must be dovetailing of the one with the other. There should be existence of inter-connection, inter-lacing, inter-dependence or unity between two or more businesses before they are considered to be the same business. The assessee-company was engaged in the Job work of flattening of wires supplied by K Co. The assessee has taken on lease the premises belonging to K Co. and set up its own machinery therein for the purpose of its activities. On account of certain problems, K. Co. closed down its factory. Therefore, the assessee could not get any job work from K Co. The assessee-company also went into financial doldrums and a provisional liquidator was appointed who took charge of the properties and sealed the factory premises pursuant to an order of Court. Thus, the assessee could not remove its machinery for the purpose of a carrying on its business activity, though the same were released subsequently. During the relevant year the machinery was not available to the assessee and,…

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