TMI Blog1996 (5) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that the assessee did not carry on any trading activity during the said year in that concern and the loss claimed by the assessee was on account of expenses debited in the profit and loss account. He asked the assessee as to why the loss so claimed be not disallowed. The assessee stated in reply that the licence of M/s. Venus Jewellers, which was a proprietary concern of the assessee was transferred to M/s. Mehrasons Jewellers,Connaught Place,New Delhiwhich was also a proprietary concern of the assessee. It was further stated that the business as such was done in M/s. Mehrasons Jewellers. The assessee further stated that the stock of M/s. Venus Jewellers was seized by the department which prevented the assessee from doing any trading in M/s. Venus Jewellers. The assessee also stated that as the income and expenditure from the said concern was considered under the head " Business " and both the concerns were proprietary concerns, the business was carried out by the assessee in M/s. Mehrasons Jewellers and, therefore, no disallowance could be made with reference to the loss so claimed. The Assessing Officer considered the assessee's explanation and observed that the plea of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 1980 and was released in December 1984. He further observed that there were no purchases or sales during the period ending on30-4-1984. Except the amount debited to rent and depreciation claimed, there was no other expenditure on any other account. He further observed that a small amount of Rs. 177 was claimed as bank commission. He, therefore, concluded that there was no business conducted from the premises of M/s. Venus Jewellers at South Extension. He also observed that the orders of the Gold Control Authority related to earlier years, which showed that the assessee had obtained a licence in November 1979 and his application for renewal of licence had been rejected on the ground that he had not conducted any business. He also observed that against the said order, the appeal of the assessee was allowed vide order dated10-8-1983. He further observed that the same, however, did not show that the assessee had been carrying on the business of gold jewellery during the year ending on30-4-1984. In the process he held that merely because the assessee had been carrying on the business of jewellery from Connaught Place, in the name of M/s. Mehrasons Jewellers, it did not mean that he w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an accumulated business loss of Rs. 56,488. From the assessment year 1954-55, i.e., commencement of the calendar year 1953, the assessee started exports of cotton textiles instead of importing woollen fabrics which business was closed by the assessee by the end of the calendar year 1952. The assessee claimed that the said loss of Rs. 56,488 incurred with reference to import and sale of woollen fabrics, etc., should be set off against the profits made by the assessee during the assessment years 1954-55 to 1956-57. In view of the said decision the learned counsel urged that though the said case related to a limited company, the ratio of the said case with reference to unity of control and common management should be applied in the case of the present assessee in relation to the business of gold jewellery being carried on from the aforesaid two concerns and the loss claimed by the assessee from M/s. Venus Jewellery should be allowed. 2.5 The learned DR, Shri B. P. Misra relied heavily on the orders of the tax authorities. He further submitted that the assessee had no licence under the Gold Control Act for carrying on the business from M/s. Venus Jewellers. He further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sales and purchase of jewellery from the said premises. The learned counsel further tried to argue that the assessee was maintaining the said business premises and that the loss claimed was on account of minimum expenditure incurred by the assessee on rent of the shop premises, apart from depreciation on furniture and fixtures and some bank commission. He also laid emphasis on the fact that the assessee was carrying on the same business, i.e., business of sale and purchase of gold jewellery from the said two concerns and that in view of the aforesaid decision of the Hon'ble Supreme Court the test of unity of control and common management should be applied in the case of the assessee and the loss from M/s. Venus Jewellers should be allowed on that basis. It is observed from para 4 of the order of the learned CIT(A) for the assessment year 1985-86 that the stock of jewellery amounting to more than Rs. 4 lakhs which was seized in November 1980 was released in December, 1984. The fact relating to release of seized jewellery in December 1984 has not been controverted by the learned counsel. It is further observed that the accounting period of the assessee is31-3-1985in relation to as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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