1966 PLP 291 (PTD)

Sh. Abdul Haq for Applicant. Muhammad Amin Butt for Respondent. Date of hearing: 23rd December 1965. MUHAMMAD YAQUB ALI, J.‑The Income‑tax Appellate Tribunal has at the instance of the Commissioner of Income‑tax, Lahore, referred the following question to this Court for opinion:‑ "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the businesses of refrigeration and that of supply of vegetables and fresh fruits to the Army were the same within the meaning of section 24(2) of the Income‑tax Act."

2. Before the Tribunal, it was conceded by the assessee that the above question framed by the Department arose as a question of law from the Tribunal's order, dated the 28th of June 1963, whereby the appeal preferred by the Department against the order of the Appellate Assistant Commissioner was dismissed and it was held that the activity of refrigeration and that of supply of vegetables and fruits etc. by the assessee to the Army constituted same business for the purposes of section 24(2) of the Income‑tax Act. We, however, are of the opinion that on the finding of the Tribunal a question of law, as contemplated in section 66 (1) of the Income‑tax Act, does not arise in the case. In the aforesaid order the Tribunal had found as follows:‑ "It is clear to us that refrigeration business and the supply of fresh fruits and vegetables were interlaced and could not be carried on with complete independence from each other. If the assessee stopped the cold‑storage it will affect the supplies and eventually it will have to be stopped. There was complete unity and inter‑dependence embracing the two activities. When outsiders were not coming in sufficient numbers, the assessee had to utilise the space for his own goods and these goods had to be cleared through sales. It made no difference whether the cold‑storage was utilised for preserving the goods belonging to others or was used for the same purpose in respect of goods belonging to the assessee himself." The question whether the activities of the assessee constitute the same business is, thus, one of fact and there was evidence on which the Tribunal had come to their decision. It was said that as a matter of law the two activities of the assessee were separate business, but such a conclusion will depend on the facts of the case. There is no provision in law according to which the two activities may be held to be separate businesses. Business' is defined in section 2(4) of the Income‑tax Act as "includes any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce or manufacture." it is obvious that no help can be drawn from the definition in this behalf. Similarly, no criterion is laid down in section 24 (2) for determining whether more than, one activities carried on by the assessee constitute the "same business" or "separate businesses" for the purpose of setting off loss of one activity against the profits made by the other. As observed by Rowlatt, J. in Scales (H. M. Inspector of Taxes) v. George Thompson & Company, Limited (13 T C 83) the real question is whether there is any interconnec tion, any inter‑lacing, any inter‑dependence, any unity at all embracing the two activities of an assessee. On the finding of the Tribunal that the two activities of the assessee were , inter‑connected and inter‑dependent, the profit made by the assessee in the account of refrigeration and ice‑production etc. at Rs. 9,927 and the depreciation brought over from the preceding years had to be set off against the carried forward loss of Rs. 2,02,297 arising from the supplies of vegetables and fruits etc., to the Government.

3. On these facts, no question of law as contemplated in section 66 (1) of the Income‑tax Act arises from the order of the Tribunal, dated the 28th of June 1963. The reference is answered accordingly. In the circumstances, there shall be no order as to costs. S. Q. Reference answered accordingly.