TMI Blog1981 (4) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... ., Ujjain?" 3.. Facts as stated by the Tribunal/Board of Revenue and admitted before us are as follows: The assessment periods involved in these references are 25th October, 1970, to 31st March, 1971, and 1st April, 1971, to 30th June, 1972. The assessee, M/s. Synthetics Ltd., Ujjain, is a registered dealer engaged in the business of manufacture of synthetic yarn. The assessee started construction of the factory for manufacture of synthetic yarn during the assessment periods in question. Production of synthetic yarn actually commenced on 1st October, 1972, i.e., after the assessment period ending on 30th June, 1972. There was no manufacturing activity during the periods of assessment under reference. The assessee had purchased building ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of its factory "in the course of its business". 8.. Section 2(bb) defines "business" as follows: "(i) Any trade, commerce, manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern and irrespective of volume, frequency, continuity or regularity of such trade, commerce, manufacture, adventure or concern; and (ii) Any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern." (sic) 9.. It was contended by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as purchases "in the course of business". 11.. The learned standing counsel laid great emphasis on the definition of business as amended vide Act No. 16 of 1965 with effect from 15th April, 1965. His contention was that under clause (ii) of section 2(bb) of the Act any transaction in connection with or incidental or ancillary to such trade, commerce, manufacture, etc., partook the character of business and invited levy of purchase tax under section 7 of the Act. The business of the assessee was manufacture of synthetic yarn. Any transaction in connection with or incidental or ancillary to the manufacture of synthetic yarn would certainly be a transaction covered by clause (ii) of section 2(bb). But, purchasing of building materials for er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. The ratio of the decisions in the above cases is that profit-making is no more a prerequisite for defining an activity as business. In that context it was held that running a welfare scheme like providing canteen facilities to workers, etc., would partake the character of business because such an activity was incidental to the principal business. 13.. In the instant case, as the business had not yet commenced, the building materials were not purchased in the course of the business. Secondly, these purchases could not constitute transactions connected with or ancillary to the business of the assessee. 14.. We, therefore, answer the question referred to us in the affirmative. Our answer is that: "Under the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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