- (1.) These are two consolidated appeals by special leave. The first is directed against an order of the Income tax Appellate Tribunal, Calcutta Bench dated March 15, 1955, and the other, against an order of the Calcutta High Court dated April 27, 1956, declining to ask for a statement of the case under S. 66(2) of the Indian Income-tax Act.
(2.) The facts are as follows : Setabgunj Sugar Mills, Ltd., is the appellant. This Company was incorporated in 1934, and was established to take over some sugar mills run by a firm. Included in the objects for which the Company was established was the business of buyers, sellers and dealers in jute, gunnies, oil seeds, etc. For the first few years, the Company carried on the business of manufacture and sale of sugar only. In the accounting year ending August, 31, 1945, the Company had some transactions in gunnies and made a profit. In the next accounting year ending August 31, 1946, the Company made also a profit in transactions in gunnies and jute. In the accounting year ending August 31, 1947, (corresponding assessment year being 1948-49), the Company did business in mustard seeds, gunnies and hessian and made profit. After this assessment year, the Company ceased to have any business other than the manufacture and sale of sugar.
(3.) We are concerned with the assessment year 1948-49, corresponding to the accounting year ending August 31, 1947. In that year, the profits from the sale of gunnies, mustard and jute amounted to Rs. 6,14,018/-. Some of the business was done by purchases or sales in the territory now in Pakistan. During the same accounting year, the sugar business resulted in a loss of Rs. 2,09,306/-. The loss in sugar business was set off against the profits of the other businesses, and the Income-tax Officer by his order assessed the Company on an income of Rs. 4,04,712/-. The Company claimed to set off against this profit, business losses of back years in its business in sugar amounting to Rs. 13,43,069/- which had been brought forward from the previous year. The contention of the Company was that these losses were of the same business, and that S. 24 (2) of the Indian Income-tax Act applied. This contention was not accepted. On appeal to the Appellate Assistant Commissioner, the contention of the Company was accepted. The Commissioner of Income-tax then preferred an appeal before the Income-tax Appellate Tribunal (Calcutta Bench), which was allowed. The Tribunal gave reasons why the various activities of the Company could not be construed as the same business for the application of S. 24 (2);