1982 PLP 179 (PTD)

SYED MUHAMMAD HUSAIN. J.‑‑These six applications at the instance of the Commissioner of Income‑tax, Chittagong Zone under section 66(2) of the Income ‑tax Act relate to the claim of the respondent Sterling Plywood Products Ltd. to set off profits for the assessment years between 1963‑69 as against the loss incurred by the assessee in the assessment year 1962‑63 under subsection (2) of section 24 of the Income‑tax Act.‑ The assessee‑Company incurred a loss up to the assessment years 1962‑63 when the business of the assessee‑Company used to be run directly by the assessee‑company. On and from 1st June, 1961, the assessee‑Company entered into an agreement with a firm N. Rahman & Company providing for the running of the assessee's business by the said N. Rahman & Company. In this connection it may be mentioned that apart from running the business at the instance of N. Rahman & Company there was no change in the composition . of ownership of the assessee's business and the assessee‑Company continued to remain the owning Company of the business in question. During the assessment periods between 1963 and 1969 when the assessee's business used to be run by N. Rahman & Company there was a profit on the business, the assessee Company claimed sit‑off of such profit for the assessment years 1963‑69 as against the loss found in the assessment years 1962‑63 under subsection (2) of section 24 of the Income‑tax Act. Both the Appellate Commissioner and Tribunal having allowed such set off the Department concerned preferred these applications before this Court. under section 66 of the Income‑tax Act. So far as the loss incurred in the assessment year 1962‑63 and the profits earned in the assessment year during 1963‑69 are concerned these are admitted and undisputed fact. The only question is whether such profit earned during the assessment years between 1963‑69 could be set off' as against the loss incurred in the assessment year 1962‑1963. Subsection (1) of section 24 of the income‑tax Act provide that where any assessee sustained a loss of profits or gains in any year, under particular head, he shall bed entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year. Subsection (2) of section 24 of the Income‑tax Act further provides that when such loss cannot be wholly set off under subsection (1) as aforesaid, so much of the loss of the previous year: shall be carried forward to the following years. Clause (ii) of subsection (2) of section 24 of the Income‑tax Act further provides that where the loss was sustained in any other business, it shall be set off against the profits or gains or such business, if such business continued to be carried on in that particular years. In the present case in the admitted position of loss in the previous years and profits in the subsequent years, the only question that calls for decision is whether the loss sustained in the business in the previous years could be set off against the profits of the subsequent years on the assumption that the business in the relevant periods of loss and profits continued to remain the same business as contemplated in clause (ii) of subsection (2) of section 24 of the Income‑tax Act. In the present case when the profits in question were earned by the assessee‑Company its business used to be run by N. Rahman & Company by virtue of an agreement between them. By dint of such agreement the assessee‑Company never ceased to own and hold the business of the Company as such and it merely carried on the same business through another firm. The composition of the Company owning the business having never changed by mere agreement if someone was allowed to run the business it never meant that it was not the same business as such. Further whether the business was the same in the period when the assessee‑Company incurred the loss and in the periods when it earned profits is primarily a question of fact. These questions of fact having been concurrently found by the Appellate Commissioner and the Tribunal in the affirmative, this court exercising its jurisdiction under section 66 of the Income‑tax Act cannot further interfere with the finding of the fact finally arrived at by the Tribunal. In that result, these applications are rejected. SULTAN HOSSAIN KHAN, J.‑‑I agree. Applications rejected.