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Issues: Whether the evidence before the Tribunal was sufficient to support the finding that the assessee's share-dealing activity was distinct and separate from its sugar manufacturing and distillery business for the purpose of set-off of loss under section 24(2) of the Indian Income-tax Act, 1922.
Analysis: Relief under section 24(2) is available only where the loss is attributable to the "same business" as the business from which the later profits arise. The governing test is whether the ventures are interlaced, interdependent, and dovetailed into one another so that the existence or discontinuance of one affects the other. The assessee bore the onus of placing before the tax authorities material showing such unity of business. On the record, there was no evidence explaining the purchase of the shares, the benefit, if any, derived by the sugar business, or the reason for the subsequent sale of the shares. The Tribunal's conclusion that the share transactions constituted a separate business was therefore based on evidence and did not call for interference.
Conclusion: The finding that the share business was distinct from the sugar manufacturing and distillery business was supported by evidence and was upheld.
Ratio Decidendi: For section 24(2), the decisive test is whether the ventures are so interlaced and interdependent as to constitute the same business, and the assessee must prove this unity by material evidence; a Tribunal's finding on separateness will not be disturbed if supported by evidence.
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