1977 (8) TMI 90

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....daswamy Naidu and Rudrappa Naidu. The partnership deed stated that it was to be one at will. The assessee firm was doing business in scented tobacco and cigars. It transpires that some time thereafter they purchased buses for the value of Rs. 38,000 and the bus business was done in the name of Bhagavathi Transport. The assessment order for the year 1952-53 refers to the business of manufacture and sale of cigars, scented tobacco as well as bus transport. 3. Copy of account of Bhagavathi Transport in the folio of the cigar business in the accounting period 1951-52 shows inter Schedule transactions. In due course the assessee borrowed funds and a part of the funds found their way in the bus business. In the books of the bus business in the c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of Bhagavathi Transport, which according to the Commissioner was a business which was discontinued. According to the Commissioner, interest in respect of discontinued business could not be allowed. He did not accept the contention of the assessee that the business was only dormant and was not discontinued. He also did not accept the contention of the assessee that the payment of interest had to be considered to be for the purposes of business, since according to the Commissioner, the payment was for a defunct business. The assessee had finally urged that the bus business and other business was an integrated one, but this contention the Commissioner did not accept and he held that the business were separate ones. 6. The assessee is in appe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....port business was only dormant and had not been discontinued. This is because admittedly retrenchment compensation was paid to the workmen. All the buses and routes had been sold. We therefore hold that the bus business was discontinued. 9. The Supreme Court in the case of Standard Refinery and Distillery Ltd. vs. CIT(1) has made the following observations regarding the aspect as to whether the trading activity formed one business or not:-- "But this Court has laid down certain objective tests for finding out the existence of inter connection, inter lacing, inter dependence and unity between two or more businesses. In CIT vs. Prithvi Insurance Co., Ltd. (63 ITR 632) this Court ruled that inter-connection, interlacing inter-dependence and ....