TMI Blog1961 (2) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... v) and section 10(2)(xv) of the Indian Income-tax Act? The facts briefly are that the assessee in this case carried on the business of film distribution. He also started the business of film exhibition and made returns in respect of a number of years. It appears that sometime in 1947-48 his machinery was stolen, and so, for three years, the business of film exhibition was not carried on, because apparently he was unable to do. For those three years, therefore, he made no returns and showed no activity of his business so far as the business of film exhibition was concerned. Subsequently, the machinery was recovered and the owner of the machinery brought a suit against him for its recovery and a decree was passed against the assessee. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment the above question was referred to us for our opinion. On behalf of the department Mr. Hardayal Hardy has drawn our attention to a number of cases, the first of which is Liquidators of Pursa Ltd. v. Commissioner of Income-tax [1954] 25 I.T.R. 265 (S.C.) , which is a decision by the Supreme Court. This was a case of a sugar company. There, the company decided to stop its business and began to negotiate the sale of the machinery. The business was wound up and the machinery was sold. The purchaser took possession of it. Certain stocks of sugar were, however, left to the company and they continued to be sold. The sale proceeds of the sugar and the sale proceeds of the machinery were alleged by the department to be profits from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the peculiar circumstances of this case the two businesses must be treated together and the expenses incurred on hire charges, repair charges and legal charges are allowable to the assessee under section 10(2)(v) and 10(2)(xv), because there was no intention to discontinue the business when the machinery was stolen and also because the hire charges were being paid by him during the previous years also. There seems to me to have been a continually despite the fact that the actual exhibition of films had been stopped owing to the theft of the machinery. For these reasons, I would answer the question referred to me in the affirmative and allow the assessee his costs which we assess at ₹ 250. FALSHAW J.--I agree. Question answer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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