TMI Blog1978 (6) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1961 ?" The assessee is a firm constituted of two partners both of which are joint stock companies, viz., (1) S.B. Joshi Co. (P.) Ltd., and (2) Mangaldas N. Verma (P.) Ltd. The partnership between these two entities was specifically formed for the purpose of executing a contract for the construction of an aqueduct across the river Parvati in Chambal Hydel and Irrigation Project in the State of Madhya Bharat. The business of the firm had actually commenced on November 1, 1954, though the partnership deed is one dated January 29, 1955. The partnership deed is annex. " A " to the statement of case, but cls. 1 and 20 thereof appear to be material and the same read as follows: " 1. The business of the partnership shall be: (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been made therefor in the accounts as they are not yet settled." For the assessment year 1963-64, the accounting year is the year ended March 31, 1963. Certain stock of material brought over from the preceding year was sold and the proceeds aggregating to Rs. 16,163 realised. No further stock remained to be sold at the end of the year. There were some miscellaneous receipts, and some expenses incurred on establishment, etc. There was a further debit of Rs. 25,630, being interest payable to the partners on their capital contribution. After taking all these items into consideration the profit and loss account showed a net loss of Rs. 23,290 which was duly debited to the partners' accounts in equal shares. The profit and loss account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the remaining constructional material and stores, and that such disposal or realisation was part of the business of the assessee. It was submitted in the second instance that so long as the bills submitted had not been settled and the charges were being negotiated the business activities of the assessee could not be said to have ceased. The Tribunal, however, did not accept either of these contentions. The sale of surplus stores, in the view of the Tribunal, was merely in the course of winding up and not in the process of carrying on a business. The Tribunal has observed that this contention was not pressed further before it. As far as the second submission was concerned, reliance was placed on behalf of the assessee on the assessee's fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e execution of a contract which execution had been completed earlier. The Tribunal was unable to accept the submission that the business of a construction contractor would continue till the amount payable to him was finally settled. Before us learned counsel for the assessee submitted that as a matter of fact it was in the accounting year ending March 31, 1969, that the assessee had received the amount of Rs. 5 lakhs which was the amount settled against the assessee's claim made in the letter, a portion of which has been extracted earlier. He urged that the assessee had been taxed on this receipt as a receipt from business and submitted that if that was so, it must he held that the assessee was carrying on business right up to the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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