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Issues Involved:
1. Whether the several activities of the assessee constituted one business for the purpose of assessment. 2. Interpretation of Section 24(2) of the Indian Income-tax Act regarding the carry-forward and set-off of losses. Issue-wise Detailed Analysis: 1. Whether the several activities of the assessee constituted one business for the purpose of assessment: The assessee, for the assessment year 1951-52, was engaged in multiple business activities, including brickworks, ration shop, lorry hire, petrol bunk, partnerships, and film distribution. The Income-tax Officer disallowed the set-off of losses from the previous year against the estimated income for 1951-52. The Appellate Assistant Commissioner (AAC) allowed a partial set-off, recognizing the head office as a controlling entity but not a separate business. The AAC concluded that the various activities, except partnerships, constituted one business. The Tribunal upheld this view, noting centralized cash control and a single balance-sheet, despite separate books for each activity. However, the Tribunal's conclusion lacked detailed discussion. 2. Interpretation of Section 24(2) of the Indian Income-tax Act regarding the carry-forward and set-off of losses: Section 24(2) allows the carry-forward and set-off of business losses against profits from the "same business" in subsequent years. The court emphasized that "same business" implies that the distinct line of business resulting in a loss should continue in the subsequent year for the set-off to be applicable. The term "same business" is not redundant and signifies a specific line of business activity. The court referred to previous judgments (K.S.S. Soundarapandia Nadar and Brothers v. Commissioner of Income-tax, Scales v. George Thompson and Co. Ltd., Chidambaram Chettiar v. Commissioner of Income-tax) to elucidate that common ownership alone does not constitute the same business. Factors like inter-connection, interdependence, unity of control, and the ability to close one business without affecting others are crucial in determining if activities constitute one business. Conclusion: The court concluded that the assessee's diverse activities (brickworks, ration shop, lorry hire, petrol bunk, and film distribution) were disconnected and could not be considered as one business. The film distribution business, which incurred a loss in 1950-51, was not carried on in 1951-52. Thus, the loss from film distribution could not be set off against the profits from other activities. The question was answered in the negative, against the assessee, with the assessee directed to pay the department's costs.
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