2019 (2) TMI 1145

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....diture finding that the expenditure was incurred for the closure of the business and sale of the factory and premises. It was also found that the assessee did not make any payment of retrenchment compensation during the previous year relevant to the assessment year 2004-05. 2. The first appellate authority however, allowed the claim of the assessee, but, directed it to be granted as per Section 35DDA of the Income Tax Act, 1961. The Tribunal allowed the claim of the assessee finding it to be a revenue expenditure, since the assessee had two other units which were continued. The reason for closure of Kalamassery Unit was the heavy losses incurred and for purpose of continued running of the other two units. It was the business expediency whi....

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....oyment. Admittedly, the amounts agreed to be paid as retrenchment compensation was in excess of the statutory stipulation. This was also due to the workers having protested against the sale of the assets of the assessee which alone could result in closure of the business unit as also generate funds for the purpose of paying retrenchment compensation. 5. We notice that the Tribunal has examined the facts and found that the units at Mettur, Tuticorin and Kalamassery were all dealing in chemicals and the Kalamassery Unit was the largest unit which however, was incurring huge loss. It was hence the assessee decided to close down the Kalamassery Unit so as to facilitate the profitable carrying on of the other two units, situated in Mettur and T....

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....by itself suffice especially when there were various types of business carried on by the assessee, which does not constitute a single indivisible business. The Calcutta High Court held so in paragraph 29:- "Applying the above test in the context of the present case, it appears that the learned Tribunal had found on the facts that there was unity of management. After having so found it had purported to hold that inter-lacing, inter-connection and inter-dependence was not proved. As discussed above, the conclusion is not dependent on this test alone. It is the totality of the facts that will determine the question. Once control and management is found to be the same the unity is established;inter-connection, inter-lacing and inter-dependenc....