TMI Blog1966 (2) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... pressing factory at Kaithal. This factory was running at a loss and, at the end of the assessment year 1953-54, there was a registered loss of Rs. 99,932. This loss was to be set off against the assessee's future profits under section 24(2) of the Income-tax Act. For the assessment year 1954-55, accounting year ending 31st August, 1953, this factory was not solely run by the assessee Hindu undivided family, but was run as a joint concern. There was a large profit during this year. The assessee's share came to Rs. 70,015. The assessee contended that the loss brought forward should be set off against this profit. The Income-tax Officer declined to do so. In the opinion of the Income-tax Officer, the profit arose in a business different from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies was to remain closed so that higher profits could be charged from the consumers. (v) The essential nature of the agreement as a restrictive pool, in the opinion of the Tribunal, was to be found in clause 5 of the partnership deed which is already made part of the case (annexure "B"). (vi) The productive apparatus, viz., ginning and pressing factory, was the same and the nature of work done, viz., ginning and pressing, was the same. (vii) There was interweaving and interlacing between the old business and the new business. (viii) It was no doubt true that the profits under the new arrangement were to be shared between a number of persons and were not to be enjoyed by M/s. Bankamal Naranjan Das alone, but in the opinion of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed amount of depreciation and there were incidental provisions made with regard to the damage to the machinery of the assessee. The damage to machinery, over and above Rs. 500, was to be paid for by the assessee ; but the damage below that amount was to be paid for by the partnership. The control of the working staff was that of the assessee. The salary of the staff working on the machinery as appointed by the assessee was to be paid by the partnership. It is not necessary to refer to the remaining clauses of the agreement, for they are incidental to the main purpose of the agreement, namely, carrying on of the cotton ginning and pressing business. The Tribunal, while dealing with the assessee's appeal, held as follows: " We have careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s restrictive agreement. Whether it is ethical to form such a pool to compel the consumers to pay a high price is not for us to consider but the fact remains that it is essentially a pooling arrangement as contended by the assessee. It is also a fact that the restrictive arrangement was worked upon that prices were pushed up and that a large profit was made. Having considered that it was not a separate firm but a pooling arrangement, we have to see whether it is the same business. There is hardly any doubt that this is the same business because there is interweaving and interlacing between the old business and the new business. In fact, the profit-making apparatus, viz., ginning and pressing factory is the same; the nature of the work con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame business and the partnership deed has not brought about a change in that business nor has it brought into existence a new business or a different business. The mere fact that the assessee joined another person in the business which he was carrying on would not alter the nature of the business or make it a different business. Mr. Awasthy, learned counsel for the department, also relied on the decision in Banka Mal Niranjandas v. Commissioner of Income-tax. This decision again has no application to the facts of the present case. We are clearly of the view that, on the facts of the present case, the Tribunal has come to a right decision and that the Tribunal has not misdirected itself in coming to the conclusion that it was the same bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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