NASIM SIKANDAR, J.- This is a reference under section 136 of the Income Tax Ordinance, 1979 made by the Lahore Bench of the Income Tax Appellate Tribunal at the instance of Commissioner of Income Tax Central Zone, Lahore. The question framed for our consideration and reply reads as under:- "Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that in Section 24(2), clause (ii) of the Income Tax Act, 1922 the words "such business" are referable to any business other than speculative business mentioned in clause (i) of the said Section 21 (2)?
2. According to the statement of the case the assessee was engaged in the business of ready- made garments as a private limited company, In the Assessment Year 1977-78 it brought forward losses from the previous assessm ent years. However, in the Assessment Year 1978- 79 it did not engage itself in the business of readymade garments and started another business. The assessing officer refused to adjust brought forward losses on the ground that it did not relate to the same business. The learned Tribunal by relying upon the provisions of section 24(2) of the repealed Income Tax Act and a judgment of this Court recorded in re: Rais Ghazi Muhammad Khan v.
Commissioner of income Tax, Lahore. (1982) 45 Tax 9 proceeded to allow the claim.
3. Heard the learned counsel for the revenue. He submits that the opinion expressed by this Court in Tax Reference No. 220/71, decided on 29.3.1981 and reported as Rais Ghazi Muhammad Khan (Supra) was not attracted to the facts in hand. According to him since the assessee was no more in ready-made garments business the losses sustained on that account could not be brought forward which was expressly prohibited by the provisions of section 24(2) of the late Act, 1922. It is contended that the learned Tribunal clearly misconstrued the ratio settled by this Court while interpreting the provisions of sub-clause (ii) of subsection (2) of section 24 of the late Income Tax Act, 1922.
4. After hearing the learned counsel for the revenue, we are of the view that the question as framed certainly needs to be answered in the affirmative inasmuch as it is completely identical to the question considered by us in the aforesaid Tax Reference No. 220/71. While answering that question posed for our consideration and reply we expressed the view that the phrase any other business .... "undoubtedly means every business other than speculative and the word 'such' occurring in clause
(ii) refers to such non-speculative business, profession or vocation. Accordingly it was held that a set off could be claimed against the income and gains derived from any non- speculative business, profession, or vocation not necessarily being the same business, profession or vocation from which the loss had arisen. Earlier we had benefited from an opinion expressed by a Division Bench of the Karachi High Court in re: Messrs Sainrapt and ET. Brice, Karachi v. The Commissioner of Income Tax (West) Karachi (PLD 1979 Karachi 591). In that case their Lordships were also considering the import of said sub-clause of sub-section (2) of section 24 of the late Income Tax Act, 1922. In the view of their Lordships the words "such business" as used in sub- clause (ii) of section 24(2) was not controlled or qualified by word "loss" but referred to and qualified the word "in any other business" i.e. Non-speculative business. Therefore, they held that losses could be set off against profits earned by the assessee as an individual business while he was also carrying on business in partnership with another company.
5. The answer returned by this Court in the aforesaid Tax Reference certainly covers the above question as framed. The attempt on the part of the learned counsel to distinguish the facts cannot be allowed to prevail. He wishes to make out a case that the earlier opinion expressed by this Court in the aforesaid reference as also by the learned Karachi High Court the assessee continued to be in the business and therefore, the interpretation of the aforesaid phrases covered these cases. On the other band, according to the learned counsel, the present assessee discontinued the business of ready-made garments and therefore, he could not avail the benefit of the aforesaid provision of late Act, 1922. Also submits that in fact the ratio settled in both the aforesaid judgments goes in favour of the revenue that the loss could very well be set off against income of any other business.
However, he continues, in the case of the present assessee there being no business in distance the loss could not have been brought forward to be adjusted or set of against another business.
6. As said earlier the issue if the provisions of section 24(2)(ii) of the late Income Tax Act, 1922 were not attracted in case of closure of business does not discussed as such by the Tribunal, It is not so indicated even from the form of the question. Accordingly, we will refuse to accept the distinction drawn by the learned counsel for the revenue. The question as framed completely stands answered by our opinion in the case of Rais Ghazi (Supra).
7. Therefore, we will answer the question in the affirmative.