9911796707
TMI Blog1965 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... prietor of the two businesses. For the sake of convenience, the assessee maintained separate sets of accounts for the two businesses connected through a current account but these two lines of the assessee's trading activities were inter-related and inter-connected with unity of control and common funds. In respect of the assessment year, the assessee claimed a net loss of Rs. 14,059 from his trade in arecanuts, which he had temporarily suspended in the year of account on account of unfavourable market conditions due to increase of import duty on arecanuts. In support of its claim, the assessee filed a profit and loss account showing the details of the loss claimed by him and also produced the account books as well as the unused import licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that on a perusal of the accounts it was seen that Rs. 70,000 out of the borrowals in the arecanut business was invested in the rice mill business, that the interest attributable to that sum was admissible as a deduction against the income from rice mill business. The Appellate Assistant Commissioner accordingly disallowed the loss of Rs. 13,559 under trade in arecanuts and computed the loss in the rice mill business at Rs. 12,497. The assessee carried the matter in further appeal to the Appellate Tribunal challenging the disallowance of loss in the arecanuts. The Appellate Tribunal held that the Appellate Assistant Commissioner in his recomputation considered that, though the two businesses were dealt with separately by the petitioner in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to adverse conditions in the market, he temporarily suspended the arecanut business for the assessment year in question. Nevertheless, he was maintaining the establishment and was waiting for improved market conditions in arecanuts. There is nothing on record to show that he completely abandoned or closed the business for ever. On the other hand, his books of account revealed that he was meeting the establishment charges and interest payments as detailed in the accounts in the year of account. In such circumstances, is the Tribunal right in giving a finding that the assessee had closed his arecanut business and that the loss claimed by the assessee had not been proved ? The question whether the business is being carried on must depend in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in General Corporation Ltd. v. Commissioner of Income-tax. The assessee in that case carried on business in motor accessories and also in mica mining. The mica business was stopped on account of a cyclone. With a view to resume the production, the company did some prospecting work in the year of account keeping a reduced staff and incurred some expenses. The question for decision was whether the assessee, in the circumstances of the case, might be said to have been carrying on the business of mica mining, during the year in question. The learned judges observed : " When production was stopped by a cyclone, the company started prospecting to find out whether the business can be carried on, and incurred the expenses in question, with a vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act or do the work which he set out to do should not disqualify him from pleading that the expenditure that he had incurred was expended for the purpose of his business : see Inderchand Hari Ram v. Commissioner of Income-tax. Thus, on a review of these authorities, we think that the Income-tax Officer was right in allowing the loss of Rs. 13,559. Bat, still there is another question, viz., whether the assessee is entitled to ask the revenue authorities to set off the loss incurred in the arecanut business against the profits in the other business. It is an established principle that income-tax is only one tax, levied on the aggregate total of the income classified and chargeable under the various heads. It is not a collection of distinct t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elling drugs, and the other selling cloth. Nobody would suggest that these two departments constitute two different businesses. On the other hand, if you have a shop in Bombay selling cloth, and a shop in Ahmedabad selling drugs under different names and different management and under separate accounts, common ownership would hardly make them one business." In Commissioner of Income-tax v. Arunachalam Chettiar the assessee had several businesses, viz., money-lending, sugar, rice trade and bell-metal factory. He incurred losses in sugar and rice trade. The assessee claimed that the losses incurred in sugar and rice trade might be set off against the profits arising from money-lending and bell-metal factory, The question arose whether he was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
