TaxTMI 
TaxTMI 
1993 (12) TMI 16
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....f the provision for payment of electricity charges to the Rajasthan State Electricity Board?" The brief facts of the case are that the assessee, a partnership-firm, was carrying on the business of re-rolling of billets and spurn and manufacturing of iron rods, angles, plates, fish-plates, etc., at Bundi. During the year under consideration, i.e., ending on March 28, 1977, no manufacturing activities were carried on. The assessee-firm had debited an amount of Rs. 48,888 to the profit and loss account. A provision was made in the books of account for payment of electric charges. During the course of the assessment, it was found that the assessee was making the payment of minimum charges of Rs. 4,804 per month to the Rajasthan State Electrici....
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....e 28, 1977, that the connection of the assessee may be transferred from Bundi to Jaipur, if the assessee makes payment of the earlier minimum electricity charges for which the facility of making the payment in instalments was also sought by the assessee. The Tribunal came to the conclusion that the business was not discontinued altogether and the electric connection at the Jaipur factory would not have been possible unless payment of the minimum charges was made. Relying on the decision in the case of Karsondas Ranchhoddass v. CIT [1972] 83 ITR 1 (Bom), the appeal was allowed and the disallowance was deleted. Mr. G. S. Bapna has contended that because there was no manufacturing activity in the year under consideration and the factory was un....
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....e may be a long period of inactivity and still the business may continue. The Madras High Court in L. VE. Vairavan Chettiar v. CIT [1969] 72 ITR 114 has held that where the assessee was maintaining the establishment and was waiting for improved market conditions in arecanuts and there was nothing to show that he completely abandoned or closed the business forever, the business must be deemed to be continuing. It was further observed that the company may not obtain or be able to execute a single business contract for months and yet it may be deemed to be to carry on its business, if during the period of lull and inactivity it is kept alive and if it retains its registered office and holds meetings. It is not necessary that a business to be ....