TMI Blog1967 (3) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... kies " at Ahmedabad and carried on the business of exhibiting cinematograph films in that theatre. After the expiry of the lease the landlord filed an action in the civil court in ejectment against the appellants and obtained a decree for possession of the theatre and an order for payment of mesne profits. The civil judge at Ahmedabad determined in a proceeding under Order XX, rule 12, of the Code of Civil Procedure, the liability of the appellants to pay mesne profits at Rs. 2,57,963. In appeal the claim of the landlord for mesne profits was settled by consent and the amount was reduced to Rs. 1,90,220. In proceedings for assessment of income for the assessment year 1955-56 the appellants claimed Rs. 92,240 out of the amount of mesne pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, the amount of Rs. 92,240 was allowable as a deduction in determining the business income of the assessee for the assessment year 1955-56 ? " The High Court answered that question in the negative. With special leave, the appellants have appealed to this court. It was common ground before the High Court that mesne profits payable by an assessee under a decree for possession of the premises used for the purpose of the assessee's business is an item which is properly chargeable to profits under section 10(1) of the Income-fax Act in computing his taxable income. It was also common ground that the burden of proving that the amount claimed was an item properly chargeable in the previous year (calendar year 1954) relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot carried on in that year, the assessee can obviously not seek to debit the expenditure incurred for carrying on that business, against his other income, for the outgoings are chargeable only against the income of a business which was carried on in the previous year. It follows that if an assessee carries on several distinct and independent businesses, and one of such businesses is closed before the previous year, he cannot claim allowance under section 10 of the Act of an outgoing attributable to the business which is closed against the income of his other businesses in that year. The only question which therefore fell to be determined is whether the business in respect of which the allowance is claimed was carried on in the year of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not a pure question of fact. Counsel relied upon the judgment of this court in Setabganj Sugar Mills Ltd. v. Commissioner of Income-tax. It is true that the question whether different ventures and activities of business carried on by an individual constitute one business or different businesses is not a pure question of fact. As pointed out by this court in Setabganj Sugar Mills Ltd.'s case in determining whether different ventures may be said to constitute the same business it has to be seen whether there was any interconnection, any interlacing, any interdependence, any unity embracing the ventures, and whether the different ventures were so interlaced and so dovetailed into each other as to make them into the same business. These pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e profits were properly allowable as expenditure against the business income of the appellants. It is true that the appellants were conducting cinema theatres in Ahmedabad and Bombay, and the result of the accounts of the different ventures was entered in the accounts maintained at the head office, but from that circumstance no inference necessarily arises that the exhibition of films in different theatres constituted the same business. It was for the appellants to establish that different ventures constitute parts of the same business. There is in this case no evidence about unity of control and management, or inter-relation of the business, or employment of the same staff to run the business, or the possibility of one theatre being clo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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