Same Business Test blocks set-off of earlier losses where the later activity is a distinct line of trade.

Carry forward and set-off of losses from an earlier activity is unavailable where the earlier and subsequent operations do not constitute the same continuing business. The assessee had discontinued its managing agency business and later carried on trading in iron and steel pipes; on the facts found by the Tribunal, these were distinct lines of trade and not one continuous business. The High Court upheld the Tribunal's refusal to permit the managing agency losses to be adjusted against profits from the later business, and the claim for set-off was rejected.

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Issues: Whether the assessee's earlier managing agency business and later trading in iron and steel pipes constituted the same business for the purpose of carrying forward and setting off the losses of the former against the profits of the latter.

Analysis: The assessee had ceased the managing agency activity and entered a different line of trade. On the facts found by the Tribunal, the earlier and later activities did not form one continuous business, and there was no infirmity in the Tribunal's refusal to treat the losses as available for set-off against the profits of the new business.

Conclusion: The question was answered against the assessee and in favour of the Revenue.

Final Conclusion: The reference failed on the main question, and the claim for carry forward and set-off of the managing agency losses was rejected.

Ratio Decidendi: Carry forward and set-off of losses from an earlier activity is unavailable where the earlier and subsequent activities do not constitute the same continuing business.

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