TaxTMI 
TaxTMI 
1985 (7) TMI 53
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....business of the Cochin Union Bank carried on business, confining themselves to kuries only under the name and style " The Popular Kuries Limited ". Before the transfer of the business of the Cochin Union Bank, one of the employees had misappropriated certain sums. Ultimately, the High Court gave a decree for Rs. 28,185 payable from out of the assets of the employee, who had, in the meantime, died. The assessee, the Popular Kuries Limited, wrote off a sum of Rs. 20,838 as a bad debt in the course of the assessment proceedings for the assessment year 1963-64. That claim was, however, disallowed both by the Income-tax Officer and the Appellate Assistant Commissioner. For the assessment year 1971-72, the assessee filed a return disclosing an in....
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....essee while it was carrying on the banking business and that since the assessee had stopped such banking business long before the assessment year under consideration, such loss incurred in such business could not be claimed as a deduction in computing the profits and gains arising to the assessee from the kuri business. The appeal was accordingly allowed. The following questions of law said to arise out of the order of the Tribunal, annexure " E ", are referred to this court by the Income-tax Appellate Tribunal, Cochin Bench, Pursuant to the direction given by this court in the judgment dated March 30, 1979, in O.P. No. 1119 of 1977 : " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified....
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.... business or profession for which the loss was originally computed continued to be carried on by him in the previous year relevant for that assessment year. The Income-tax Appellate Tribunal, in a brief order, annexure " E ", points out: " The loss, if any, is in the business of banking. Now, it carries on only the business in kuries. So, the loss in banking business cannot be claimed as a deduction in computing the profits and gains of the kuri business...... " It has not been shown how in this approach on the facts and circumstances of the case, the Appellate Tribunal was in error. On the other hand, in his order, annexure " C ", the Appellate Assistant Commissioner has committed a serious mistake in concluding in para 5 as follows ....
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....d ceased to exist as early as in the year 1964 when it was made over to the Federal Bank Limited. For the application of section 37, it should have been an expenditure laid out or expended wholly and exclusively for the kuri business that was being carried on by the assessee during the year material for the purpose of assessment. The counsel for the assessee placed reliance on the decision of the Supreme Court in B. R. Ltd. v. V. P. Gupta, CIT[1978] 113 ITR 647, to contend for the position that the company owned by the assessee was carrying on banking and kuries business; and the business relating to kuries having been carried on by the assessee, who had initially control over both, should be deemed to have been under a common management....