Same business test: inter-lacing, inter-dependence and unity of control can raise a question of law on mixed facts.

Whether a company's sugar business and its transactions in gunnies, jute and mustard seeds formed the same business under the Indian Income-tax Act turned on the settled tests of inter-connection, inter-lacing, inter-dependence and unity of control, management, capital, staff and accounts. The factual enquiry must examine the real relationship between the activities, but the ultimate characterisation of those facts as one business is a legal inference. Where the material admits more than one possible inference, the issue is not purely factual and a question of law arises for reference.

---

---

Issues: Whether the question whether the company's sugar business and its transactions in gunnies, jute and mustard seeds constituted the same business under section 24(2) of the Indian Income-tax Act, 1922 was a mixed question of law and fact, and whether a question of law therefore arose for reference under section 66(2).

Analysis: The determination whether different ventures form one business depends on settled tests such as inter-connection, inter-lacing, inter-dependence and unity of control, management, capital, staff and accounts. The factual enquiry is directed to the real relation between the activities, but once the facts are found, the conclusion whether they amount to the same business is a legal inference drawn from those facts. On the material before it, the existence of different possible inferences showed that the issue was not purely factual and that a legal question did arise.

Conclusion: A question of law did arise, and the High Court ought to have called for a statement of the case under section 66(2).

Ratio Decidendi: The question whether different trading ventures constitute the same business is a mixed question of law and fact; if the facts found permit more than one legal inference, a question of law arises for reference.

---