HOOGLY TRUST (PRIVATE) LTD. versus COMMISSIONER OF INCOME-TAX, WEST BENGAL AND ANDAMAN AND NICOBAR ISLANDS

Citation: [1969] 3 S.C.R. 557 · Decided: 04-02-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
D 
G 
HOOGLY TRUSf (PRIVATE) LID. 
v. 
COMMis.SIONER OF INCOME-TAX, WEST BENGAL AND 
ANDAMAN AND NICOBAR ISLANDS 
February 4, 1969 
(J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] 
rncome-tax Act (11 of 1922), s. 24(2) (before its amendment by the 
Finance Act of 1955)-Business in several commodities--Lcss in one-
Set off claimed against profits in others--QuesUon of fact-When High 
Court can examine its correctness. 
The asses.see carried on. business· in several commodities including cloth. 
In tlie assessment years 1953-54 and 1954-55 the assessee suffered loss in 
cloth business, and it was determined for the purposes of s. 24(2) of the 
Income-tax Act, 1922 (as it stood before the amendment in 1955). During 
the subsequent three assessment years, the Income-tax Officer refused to 
allow the carry forward of these losses and their set off against the busi-
ness profits of th°"" years on the ground that the losses determined in the 
preceding years arose out of the cloth business which was different from 
the other business carried on by the assessee. 
He held that since the 
cloth business was not carried on during the relevant year of account the 
loss therefrom in preceding years could not be carried 'forward and set off 
against profits o( other business. 
The Appellate Assistant Commissioner 
agreed with the Income-tax Officer. The Tribunal found (i) 
that the 
asscssce's dealings in cloth started very early and the introduction of con-
trol only changed the prooedure of carrying on the business, (ii) 
that 
the assessee has been doing business in several commodities and its trad-
ing in each commodity did not constitute separate business, (iii) that the 
cloth business never assumed the proportion or the stature of a distinct 
and separate business and (iv) that there was evidence to show dovetail-
ing of cloth business into the general section. The question, as to whether 
on the facts and in the circumstances of the case, the cloth business and 
the business j.n the general section constituted the same business within 
the meaning elf s. 24(2) as it stood then, was referred to the High Court. 
Relying on most of the facts determined by the Appellate Assistant Com-
missioner, the High Court answered the question against the asse>See. 
In 
appeal, to this Court, the assessee contended that (i) the findings on ques-
tions of fact given by the Tribunal were final and it was not open to the 
High Court to examine their ccrrectness in 
the absence · of any proper 
question on the point; and (ii) on the findings of the Tribunal the losses 
on account of cloth business were liable in law to be carried forward and 
set off against the profits during the relevant assessment years. 
HELD : The question must be 
answered 
in the affirmative and in 
favour of the assessee. 
(i) In spite of the form in which the question had been referred it was 
not open to the High Court to examine the correctness of the conclmioos 
of the Tribunal on facts. If the Tribunal does not consider the evidence 
covering all the matters and bases its findings upon some evidence only 
ignoring other essential material that would amount to a misdirection in 
law and the findings would give rise to a qu.,.,tion liable to be referred to 
the High .Court. But it is equally well settled that if the question about 
the validity of the findings of fact is sought to be raised for one reason or 
558 
SUPREME COURT REPORTS 
[1969] 3 S.C.R. 
I 
another, reference of a proper question' challenging those findings must first 
be sought before those findings can l)e challenged before the High Court. 
No attempt was made before the Tribunal to have any such question re-
ferred and in the absence of a proper question it was not open to the High 
Cowt to accept· the findings of the Appellate Assistant Commissioner in 
preference to those given by the Tribunal or to come to any independent 
conclusion itself on the facts. 
The Tribunal does not appear to have di<-
cussed the entire evidenee on which the findings were based but the order 
of the Appellate Assistant Commissioner and his findings as also the entire 
record were before it and there is nothing to suggest that all the material 
'facts were not present to its mind except that they are not mentioned in 
detail. 
Its findings, therefore. must be accepted as final 
and the only 
question which it was open to the High Court to examine was whether the 
cloth business could be regarded as the same bu

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