TMI Blog1978 (7) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is carrying on the business of printing and also carrying on business in book-binding. The assessee started an independent business of book-binding in the year 1967. In the assessment for that year, the ITO refused relief under s. 80J. During the assessment year 1969-70, when a similar claim was made that was also rejected. On appeal, the AAC held that the assessee was entitled to relief. But on further appeal to the Tribunal, the Tribunal called for a report from the ITO in regard to certain matters and, on receipt of such report, held that the assessee satisfied the requirements of s. 80J(4), cls. (ii), (iii) and (iv). But it held that the assessee did not satisfy the requirement of cl. (i) of sub.s. (4) and accordingly held that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of materials ? (iii) The number of workers employed ? (iv) When did the assessee start this business ? (v) Whether any agreement exists between the assessee and the other firm, M/s. Manipal Power Press, Manipal, for the work entrusted to the assessee by the latter. If there is any agreement what does it indicate regarding supply of materials ? (vi) Whether that agreement, if any, spells out the nature of the work entrusted to the assessee that it was one purely of labour work ? The ITO made a report as follows : (i) That the business of book-binding was started by the assessee on September 1, 1967, during the previous year ending March 31, 1968. This business had two units, one at Manipal and the other at Udupi. (ii) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing,or producing articles and the undertaking employed twenty or more workers in the manufacturing process carried on without the aid of machinery. However, it was of the opinion that the undertaking was formed by the splitting up of a business already in existence. The report of the ITO did not record such a finding and there was no material brought on record by the ITO to the effect that the new undertaking was formed by the splitting up of a business already in existence. In order to hold that there it a splitting up of a business already in existence, there must be some material to hold that either some asset of an existing business is divided and another business is set up from such splitting up of assets, or that the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent and not taken out from the staff of Manipal Power Press. It was not the case of the department that the business carried on by the assessee was benami for Manipal Power Press. These are circumstances which militate against any conclusion that the business carried on by the assessee was formed by the splitting up of a business which was already in existence. The mere fact that some work of binding is entrusted to the assessee by Manipal Power Press does not lead to the inference that there is a splitting up of the business. The assessee is an independent contractor and the Manipal Power Press is as much a customer as any other of the assessee. In these circumstances, we are of the view that there was no material to hold that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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