Same business test under tax set-off rules allows speculative losses to be matched where trading activities are interdependent.

For section 24(2), a carried-forward loss can be set off only against profits from the same business. Whether two trading activities form one business is a question of fact, tested by inter-connection, inter-lacing, inter-dependence and unity. On the record, no evidence supported treating silver speculation and cotton speculation as separate businesses, so the finding of separateness could not stand. The speculative activities were held to constitute one business, and the silver speculation loss was therefore allowable against the cotton speculation profits.

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Issues: Whether a loss arising from silver speculation could be carried forward and set off against profits from cotton speculation under section 24(2) on the footing that both activities formed the same business.

Analysis: The controlling requirement under section 24(2) was that the carried-forward loss must be set off against profits from the same business. Whether two trading activities constitute the same business was treated as a question of fact. The relevant test was whether there was inter-connection, inter-lacing, inter-dependence, and unity between the activities. On the record, and particularly in the absence of any evidence supporting a distinction between the silver and cotton speculation, the finding that they were separate businesses could not be sustained. The evidence before the Court supported the conclusion that the speculative activities formed one business.

Conclusion: The loss from silver speculation was allowable to be set off against the cotton speculation profits because both formed the same business, and the answer to the reference was in the affirmative.

Final Conclusion: The assessee succeeded on the substantive tax question, and the Tribunal's contrary view on separateness of business was not supported by evidence.

Ratio Decidendi: For section 24(2), the identity of business is a question of fact to be determined by inter-connection, inter-lacing, inter-dependence, and unity of the activities, and a finding unsupported by evidence cannot stand.

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