B. R. LTD. versus V. P. GUPTA, C.I.T., BOMBAY

B. R. LTD. versus V. P. GUPTA, C.I.T., BOMBAY

The decisive test for 'same business' under Section 24(2) is unity of control, interconnection, interlacing, interdependence, common management, fund, and place of business. Different procedures and different goods do not preclude activities from constituting the same business if there is substantial unity and control. The appellant's import and export activities met these criteria and thus constitute the same business.

Parties
Appellant: B. R. LTD.; Respondent: V. P. Gupta, C.I.T., Bombay
Jurisdiction
India
Judgment Date
03 May 1978
Procedural Posture
Civil Appeal / Appeal From Commissioner's Order Under Section 33 A, Income Tax Act, 1922
Outcome
Appeals allowed; orders of Commissioner set aside.
Legal Topics
Loss Carry Forward, Set Off Under Section 24(2), Same Business Test
Income Tax Law Loss Carry Forward Set Off Under Section 24(2) Same Business Test

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Parties

B. R. LTD.

Appellant

V. P. Gupta, C.I.T., Bombay

Respondent

Procedural Posture

Civil Appeal / Appeal From Commissioner's Order Under Section 33 A, Income Tax Act, 1922

Legal Issues

  1. 1 Whether the business of import and sale is the 'same business' as export for purposes of set-off of loss under section 24(2) of the Income Tax Act, 1922

Ratio Decidendi

The decisive test for 'same business' under Section 24(2) is unity of control, interconnection, interlacing, interdependence, common management, fund, and place of business. Different procedures and different goods do not preclude activities from constituting the same business if there is substantial unity and control. The appellant's import and export activities met these criteria and thus constitute the same business.

Court Disposition

Appeals allowed; orders of Commissioner set aside.

Orders

  • Appellant is entitled to set off the unabsorbed loss of the assessment year 1953-54 against profits of assessment years 1954-55, 1955-56 and 1956-57.
  • Appellant will get costs in one set from respondent.