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TMI Blog1982 (8) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... 77-78, the second firm used to manufacture brass circles for itself and its godown was also used to get brass-circles manufactured for others on wages by its labourers. During the year also the same operation has been carrying on by the assessee in the same godown. He noted that the control and management remained with M/s Jaikishan Raghunath, in which the partners are Shri Khemraj, Shri Radheyshyam and Shri Shivnarayan. Shri Khemraj is the father of Shri Shivnarayan and Shri Radheyshyam is very old and practically did not participate in the conduct of business. He observed that the other two partners of M/s Jaikishan Raghunath are controlling, conducting and managing the affairs of M/s Ramesh Metal Industries as well. According to the ITO M/s Ramesh Metal Industries has practically no independent existence and has not established any independent identity in the practical sense. He went on further to note that the funds to this new firm flowed from M/s Jaikishan Raghunath as could be apparent from their letter dt. 3rd Nov., 1979 wherein they have stated that the capital by the partners of the concern was withdrawn from M/s Jaikishan Raghunath. He noted that M/s Jaikishan Raghunath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clubbed in the hands of M/s Jaikisahn Raghunath. The claim of the assessee is that M/s Ramesh Metal Industries is a separate firm having separate sales-tax numbers, separate licence and has been properly constituted by a deed of partnership and under the facts of the case, both the firms are separate and should be assessed separately, the ITO rejected the explanation of the assessee, particularly in view of his opinion expressed to the effect that Ramesh Metal Industries is not a genuine firm. The ITO was of the opinion that having separate sales-tax registration numbers, etc. would not be material, in view of the fact that there was unity and control and management of financing for the entire business. He was still of the view that Ramesh Metal Industries is a branch of the main firm. Accordingly, the clubbing of the income, as mentioned above was done. 5. Against the above two separate orders of the ITO, the assessee preferred an appeal before the AAC who vide his separate orders, accepted the claim of the assessee that the two firms are separate and should be taxed independently. Before the AAC, it has been contended on behalf of M/s Ramesh Metal Industries that the control and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparate firm and its income has to be clubbed in the hands of M/s Jaikishan Raghunath. He noted that after the death of Shri Kajorimal, a new firm came into existence with a new partner Shri Rameshchandra and the retirement of Shri Khemraj itself would show that the new firm has nothing to do with the old firm. He noted that there is no inter-connection between the two firms, their nature of business is separate, their management and control is also separate and, therefore, it cannot be said that Ramesh Metal Industries continued to be a branch of the assessee. The AAC accepted the appeal of the assessee in this case also and directed that the clubbing of the income of Ramesh Metal Industries should be excluded from the assessment of Shri Jaikishan Raghunath. 7. Before the AAC the assessee has taken additional ground in the case of M/s Jaikishan Raghunath contending that in view of the decision of the Hon'ble Madhya Pradesh High Court in the case of Ganesh Dal Mill, Indore, in Misc. Civil Case No. 40 of 1977 dt. 30th Sept., 1980, the ITO was not justified in making one assessment for the whole year. The AAC, following the ratio of that decision directed that two assessments should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in (1964) 53 ITR 351 (Cal). It is submitted that the appeals of the assessee may be accepted. 11. In respect of the AAC's direction to make two assessments in the case of M/s Jaikishan Raghunath, it is submitted on behalf of the Revenue that the AAC erred in directing the ITO to make two assessments, as mentioned briefly above. It is submitted that the facts of the decided case are different in which two returns were filed and accordingly the Hon'ble High Court was of the view that two assessments should be made whereas in the present case, the assessee, namely, M/s Jaikishan Raghunath, has filed only one return for the whole year and, therefore, on the basis of one return, two assessments can never be made. It is urged that the AAC went wrong in directing to make two assessments for one year when there are no two returns. 12. On behalf of the assessee it is pointed out that along with return the manner of computation of the income for the first period and the second period was given. It is submitted that the assessment would have to be made and the ITO would only make allocation of income for the different periods and that there is no difference whether the assessee filed one r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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