Shah, J. - (1.) The appellant is a public limited company doing business as a dealer in diverse commodities, and also in stocks and shares. The Company maintains its accounts according to the calendar year. In the year of account 1949 the Company suffered a loss of Rs. 3,71,700 in the sale of shares of public limited companies. In proceedings for assessment of income-tax for the assessment year 1950-51, the Income-tax Officer disallowed the claim to set off loss against the profits from transactions in other commodities in that year. The appeal filed before the Appellate Assistant Commissioner was unsuccessful. But the Appellate Tribunal upheld the claim of the Company.
(2.) In the meanwhile assessment for the year 1951-52 was completed, and the income of the Company was computed at Rs. 1,00,777. In proceedings for assessment of income for the assessment year 1952-53 the Income-tax Officer computed the income of the Company from its business at Rs. 3,39,899 and declined to take into account the loss suffered by the Company in the share transactions. In the view of the Income-tax Officer, even if the loss be treated as a trading loss it could not be set off against the business income of the Company, because the loss resulted from transactions in shares which constituted a business distinct from the business in other commodities.
(3.) In appeal against the order to the Appellate Assistant Commissioner, the order of the Income-tax Officer was confirmed. The Appellate Assistant Commissioner held that the business in shares and the business in other commodities were not the "same business" within the meaning of S. 24 (2) of the Income Tax Act, 1922, as then in force. He observed that a common capital, a common set of employees and a common set of accounts and common business premises are not "the deciding factors in determining whether the various activities carried on by the assessee constituted one business or separate businesses:" it is the nature of the business which is "the main factor" and where separate profit or loss was ascertainable and the nature of the business was different, the activities could not be held to form one and single unit for the purposes of S.24 (2) of the Indian Income-tax Act.;