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Interpretation of "same business" under section 24(2) of the Indian Income-tax Act, 1922 for loss set-off. Analysis: The case involved a reference under section 66(2) of the Indian Income-tax Act, 1922, concerning the set-off of a loss incurred by an assessee, a public limited company, in the purchase and sale of shares against the profits of its other businesses. The assessee contended that the share business was interconnected with its main businesses of liquor, sugar, and molasses manufacturing, as they shared staff, capital, and management. However, the Tribunal held that mere common ownership or management does not establish businesses as the "same business" for loss set-off purposes. The Tribunal required interlacing, interdependence, or dovetailing of businesses, where the discontinuance of one would affect the other. The Tribunal found no evidence of such interconnection between the share business and the main businesses of the assessee. The court analyzed the provisions of section 24(2) of the Act, emphasizing that the assessee must provide all relevant materials to establish that the loss was incurred in the "same business" to claim relief for up to six years. The court noted the absence of evidence regarding the timing of share purchases in relation to the lease, benefits to sugar manufacturing, or the subsequent sale of shares. Referring to legal principles established by previous judgments, the court reiterated that determining the "same business" involves various factors like unity of control, interrelation, common capital, staff, and interdependence. The court upheld the Tribunal's finding that the share business was distinct from the other businesses of the assessee due to the lack of interconnection. The court highlighted the onus on the assessee to prove entitlement to set-off under section 24(2) and noted that the assessee failed to discharge this burden by not demonstrating the required interconnection between the share business and its main operations. Citing a Madras High Court decision, the court emphasized that the Tribunal's factual findings must be supported by evidence, and in this case, the court found no reason to interfere with the Tribunal's conclusion that the share business was not the "same business" for loss set-off purposes. Consequently, the court affirmed the Tribunal's decision, ruling in favor of the respondent and directing the applicant to pay the costs of the reference.
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