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TMI Blog1945 (2) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... aikudi, where he also bought and sold securities on his own account. After setting off the loss against the profits of the business abroad, there was a net loss of ₹ 21,522 which was carried forward to the next year. In the assessment for that year (1940-41) it was found that there was again a loss of ₹ 23,125 at Karaikudi, but the business at Penang resulted in profits. The assessee claimed that not only the loss of ₹ 23,125 but also the unadjusted balance of loss carried forward from 1939-40, viz., ₹ 21,522, should be set off against the foreign profits. The Income Tax Officer disallowed the claim so far as it related to the sum of ₹ 21,522, but allowed the loss of ₹ 23,125 suffered in the year of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d so on; but no loss shall be so carried forward for more than six years, and a loss arising in the previous years for the assessment for the years ending on the 31s day of March, 1940, the 31st day of March, 1941, the 31st day of March 1942, the 31st day of March, 1943 and the 31st day of March, 1944, respectively, shall be carried forward only for one, two, three, four and five years, respectively. It will be seen that the right to carry forward and set off loss against the profits of the following year or years allowed under this provision is subject to the condition that the profits against which the set-off is claimed should have arisen out of the same business as the one which resulted in the loss. The point at issue accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emittances to and from Penang or the incorporation of the final trading result at the end of the year would not be enough to constitute the two activities one single business. We cannot accept this as a conclusive finding of fact. The first part of the statement mentions no facts, but only records a conclusion of law, and the rest is merely concerned with rejecting certain facts relied on by the assessee as not enough to justifying an inference in his favour. If there was no other material before us we should have referred the case back to the Tribunal for a proper statement of the case, but this course is rendered unnecessary as the material facts appear in the orders of the Income Tax Officer and the Appellate Assistant Commissioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from the headquarters business is derived mostly, if not entirely, from interest and also from stocks and shares, whereas the income from Penang is stated by the Income Tax Officer to be mostly from the produce of the rubber gardens. (c) The accounts are made up for these two business separately. (d) The staff for each business is separate and there is no interchange of staff. (e) The great distance between them is a matter of much importance. (f) It is not the appellants case that the foreign business is controlled and managed by the appellant himself and not by a separate agent there. (g) There are no common financial arrangements and bank accounts. None of these facts is, in our opinion, sufficient to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surplus capital (menpanam) to Penang. There is no reference to these facts in the record before us, but they are probably true as they are also among the usual features of a Nattukottai Chetti money lending business. But, even if true, they represent only book-entries designed to show how the branch was working and whether it was a source of profits or loss and do not lead to an inference that a separate business was carried on at Penang. As the Income Tax authorities did not rely on these facts in support of their finding it is unnecessary to pursue the matter further. Reference was made in the course of the argument to certain decisions wherein different activities were held to constitute separate businesses or to form part of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents has cited several English decisions in support of his contention. In Scales v. George Thompson Co., Ltd., already referred, to an underwriting venture at Lloyds carried on by a ship-owning company through its nominees was held to be a business distinct ship-owners, as the two things have nothing whatever to do with one another the learned Judge emphasizing at the same time that it was a question of fact. It is unnecessary to refer to the other cases cited before us as they differ even more widely from the facts we have before us. For the reasons indicated we hold that the assessees banking and money-lending operations at Karaikudi and at Penang constitute one and the same business, and that he is entitled to the set-off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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