Same business test for business loss set-off turns on unity of control and common management, not identical activity.

For carry forward and set off of business loss, the decisive test is whether the later activity forms the same business through unity of control, common management and sufficient inter-connection, rather than whether the later activity is of the same nature as the original line of business. A mere closure of one activity does not by itself create a different business if the business organisation continues under common control. On the facts recorded by the Tribunal, the assessee's business retained unity of control and common management, so the brought forward loss could be set off against later business income and the Tribunal's allowance of the claim was affirmed.

---

---

Issues: Whether, for the purpose of carry forward and set off of business loss, the assessee's later business activities constituted the same business as the business in which the loss was originally incurred.

Analysis: The governing test under the business-loss set-off provision is not the nature of the two lines of business, but whether there is unity of control, common management, common control and sufficient inter-connection between the activities. Applying the principles recognised in the Supreme Court decisions on the subject, the close of one activity does not by itself make the subsequent activity a different business if the same business organisation continues under common control. The Tribunal had recorded a finding of fact that the assessee's business retained unity of control and common management, and the later income was business income against which the brought forward loss was claimed.

Conclusion: The set off of the brought forward business loss was permissible, and the finding that the assessee carried on the same business was upheld.

Final Conclusion: The appeal failed and the Tribunal's view allowing the assessee to carry forward and set off the business loss was affirmed.

Ratio Decidendi: For carry forward and set off of business losses, the decisive test is unity of control and common management, not the mere nature or identity of the particular business activity.

---