9911796707
TMI Blog1966 (10) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances of the case, the disallowance of Rs. 27,700, Rs. 28,212, Rs. 29,813, Rs. 32,123 and Rs. 44,000, representing the interest paid on capital borrowed for purposes of the business, is lawful? " The assessee commenced in the year 1944 a business, which consisted at the time of buying, processing and selling cashew-nuts. From the year 1946, he also engaged himself in the manufacture of tin cans for canning processed cashew-nuts at that time. Apparently, the manufacture of tin cans proved more profitable and after the year 1948, he stopped doing business in cashew-nuts, except that in the year 1949, he disposed of cashew-nuts which remained in stock worth Rs. 822-14-0. Later, he embarked on a third venture, that of manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt also laid down : " Certain principles are applied to determine whether, on the facts found, a legal inference can be drawn that the different ventures constitute separate businesses or viewed together, can be said to constitute the same business. These principles were stated by Rowlatt J. in Scales v. George Thompson & Co. Ltd. The learned judge observed : '. . . the real question is, was there any inter-connection, any inter-lacing, any inter-dependence, any unity at all embracing those two businesses. ' The learned judge also observed that what one had to see was whether the different ventures were so inter-laced and so dovetailed into each other as to make them into the same business. These principles have to be applied to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of them is fatal to the claim that the different lines of business are really parts of the same business. " In the light of the first question referred, the history of the business, soon after the manufacture of tin cans commenced, is relevant. The Tribunal expressed itself thus : " Till 1948, the cashew-nut business and tin factory were looked after by a common manager. The staff was common to both. There was only one bank account. " For all the three ventures, there was identity of ownership, of management, of employees and of capital by borrowing. The venture on tin cans was, to start with, ancillary or subsidiary to that of cashew-nuts until by a gradual shifting of emphasis, the former developed and the latter ended. Though the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
