9911796707
TMI Blog1975 (6) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... re year 71-72 was filed in the name of Janshi Co., notwithstanding the change of ownership, since apparently the sales tax licence was also continued. It appears that late M.R. Gopal was also doing business in stone quarrying contract but such business is claimed to have been discontinued even before his death in the preceding accounting year itself. But the quarry machineries were sold for an amount of Rs. 83,052. It is the contention of the appellant that the business was abandoned once for all even during the life time of late M.R. Gopal. During his life time, the deceased had a quarrying contract with the Madras Port Trust, Madras and had for this purpose, machineries and equipments like stone broker, jeep, tractor, compressor etc., Since the appellant did not get further contracts and also had on further interest in this business, the business had been abandoned. All these were treated as separate assets of quarry business, since the quarry at Pallavaram itself was shown by its name in the balance sheet of the appellants. Only when a separate balance sheet was drawn for the year ending 8th Dec., 1971 unsold quarry machineries were brought into the balance sheet as a separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thiru T.M. Sundara Raj, the learned Authorised Representative appearing for the appellant argued that the authorities have made more than one factual error. he contended that in order that the facts may suit their view, they have gone to the extent of treating the appellant s business in quarrying as business in "granite materials". He claimed that even when the business was done, it was works contract. He pointed out to an order of the same AAC for the asst. yr. 1968-69 where the receipts for the supply of granite was considered by the AAC himself as proceeds of works contract. Even granting that it was a business, such a business was a distinct one and had been discontinued. He claimed that the assets of a dead business when sold would amount to mere realisation of capital investment and there could be no question of sale in the course of business. He contended that it was more accident that the appellant was doing same other business. He also pointed out that actually the business was done by the late M.R. Gopal, who just happened to be the husband of one of the partners of the appellant firm. The fact that the sale proceeds of the quarry equipments were credited in appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the meaning of the Act. Definition of "business" under s. 2(d) reads as under: "Business includes: (i) any trade, or commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture whether or not such trade, commerce, manufacture, adventure or concern is carried on which a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure of concern; and (ii) any transaction in connection with, or incidental or ancillary to such trade, commerce, manufacture, adventure of concern.": It includes any trade or commerce or manufacture etc. In this sense stone quarrying was certainly a business. But that business did not belong to the appellant. It belongs to their predecessor late M.R. Gopal. No doubt part of the sales as for example sale of jeep took place even during his life time, but the other part of the sales took place after his death and have been credited in the partnership books. But these sales, both during his life time and after, have been credited to the trading account while the profit has been brought to the P L a/c. In respect of the sales which were made subsequent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness and that such business was discontinued even in the proceeding year should be taken as established. The issue whether the sale of capital goods could be treated as incidental, ancillary or in connection with appellant s business is closed as far as we are concerned, with the decision in T.C. 179/73 in Palaniandavar Mills case which is clearly in Revenue s favour. To this extent, the doubt we had expressed as to whether the decision of the Supreme Court in State of Madras vs. K.C.P. Ltd., reported in 23 STC 173 can be treated as over-ruled by Burmah Shell s case must be taken as having been resolved in Revenue s favour in T.C. 179/73. All the same, T.C. 179/73, does not hold that all cases of capital goods must be brought to tax just as Burmah Shell s case did not held that all current sales by a dealer should be brought to tax. In other words, whether it is of capital or other goods, the primary conditions are still there. These are (i) the business is one which "is carried on" and (2) the sales made are incidental or ancillary or in connection with appellant s business. If there is no business carried on during the year, the question whether the sale is incidental or ancilla ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
