SETABGUNJ SUGAR MILLS LTD. versus THE COMMISSIONER OF INCOME-TAX, CENTRAL, CALCUTTA.

Citation: [1961] 2 S.C.R. 488 · Decided: 17-11-1960 · Supreme Court of India · Bench: J.L. KAPUR · Disposal: Case Partly allowed

Judgment (excerpt)

488 
SUPREME COURT REPORTS 
(1961) 
'960 
business and trade organised with the object of 
Th• Ahmedabad di~covering w~ys and means _by which the member-
Textile Industry's ~mlls m~y obtam large~ profits m connection with their 
Research 
mdustrres. In these circumstances we have no hesi-
Association 
tation in coming to the conclusion that the appellant-
v. 
. 
association is carrying on an activity which clearly 
The State 01 
comes within the definition of the word "industry" in 
Bombay &- Others 
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e ass1m1 ate 
to a purely 
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educational institution. In this view of the matter, 
when a dispute arose between the appellant and some 
of its employees, it was an industrial dispute and 
could be properly referred for adjudication under the 
Act. 
November r7. 
The appeal fails and is hereby dismissed with <me 
set of costs. 
Appeal dismissed. 
SETABGUNJ SUGAR MILLS LTD. 
v. 
THE COMMISSIONER OF INCOME-TAX, 
CENTRAL, CALCUTTA. 
J. L. KAI'UR, M. HrnAYATUI,LAH and J.C. SHAH, JJ. 
Income Tax-Company having several activities-Set-off of 
loss in one, when can be claimed agait.sl profits in another-W he-
ther activities constitute one business or separate businesses-Mixed 
question of law and fact-Indian Income Tax Act, r922, (II of 
r922) ss. 24(2), 66(2). 
The appellant company which had different ventures claim-
ed to set off against the profits of one venture the losses of its 
other venture which were brought forward from the back years, 
contending that the losses were of the same business and 
s. 24(2) of the Indian Income-tax Act applied. The tribunal 
rejected the appellants contention and gave reasons why the 
various activities of the company could not be construed as the 
same business for the application of s. 24(2). 
The company then asked the Tribunal to make a reference 
to the High Court on questions of law arising out of Tribunal's 
order. The Tribunal declined to make a reference. The com-
pany moved the High Court of Calcutta, under s. 66(2) of 
ii 
-
2 s.c.R. SUPREME COURT REPORTS 
489 
Income-tax Act, for calling upon the Tribunal to state a case but 
1960 
the application was summarily dismissed. The company appeal-
. 
ed to the Supreme Court, by special leave, against the decision 
Setabfiun1 
of the Income-tax Appellate Tribunal and also the order of the Sugar Mills Ltd. 
Calcutta High Court. 
v. 
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· d The Commissioner 
Hel , t at t e quest10n w et er d1tterent ventures carne 
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oj ncome-tax 
on y an in .1v1 ua or a company orm one usmess is a m1xe 
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question of law and facts. 
The principle is to find out whether Centra • 
alrntta. 
there is any interconnection, any interlacing, any interdepen-
dence, any unity at all, embracing the ventures as laid down in 
Scales v. George Thomp~on & Co. Ltd. These principles have to 
be applied to the facts before a legal inference can be drawn 
that a particular business is composed of separate businesses 
and not one business. The ultimate conclusion is a legal infe-
rence from facts proved and is one of mixed law and fact on 
which application of s. 24(2) of the Act depends. 
In the instant case a question of law did arise on which the 
High Court should have asked for a statement of the case. The 
question of law is "whether on the facts and circumstances of 
the case, the business activities of the company, to wit, manu-
facture and sale of sugar and sale and purchase of gunnies, 
jute, mustard seeds, constituted the same business within the 
meaning of s. 24(2) of the Indian Income-tax Act, 1922". 
The High Court is directed to call for a statement of the 
case from the Tribunal and dispose of it according to law. 
Scales v. 'George Thompson & Co. Ltd., (1927) 13 T. C. 83, 
relied on. 
CIVIL APPELLATE Ju&Iso10TI0N: 
Civil Appeal 
No. 143 of 1958. 
Appeal by Special Leave from the Judgment and 
Order dated the 15th March, 1955, of the Income-tax 
Appellate Tribunal of India, Calcutt.a in I. T. A. 
No. 4309 of 1954. 
Civil Appeal No. 144 of 1958. 
Appeal by Special Leave from the Judgment and 
' Order dated the 27th April, 1956, of the Calcutta 
High Court in Income-tax Matter No. 9 of 1956. 
N. A. Palkhivala (In both the Appeals) and B. P. 
Mahe,shwari for tlie Appellants. 
K. N. Rajagopal Sastri a~1d D. Gupta for the Res-
pondent. 
1960. November 17. The Judgment of the Court 
was deliv~d by 
6z 
490 
SUPREME COURT REPORTS 
[1961] 
I96o 
Hrn

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