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TMI Blog1977 (8) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ndaswamy 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sport 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there were inter Schedule transactions between the cigar business and the bus business. In earlier years, advances for the cigar business was received from the bus business and later loans of the bus business were repaid out of the funds of the cigar business. The business organisation was also only a common one in the present case and there was unity of control by all the partners. The difference in the nature of two lines of business was not a conclusive that for determining whether the businesses were separate or not, but the real test was the unity of control. The test of unity of control is satisfied in the present case and therefore we hold that the bus business as well as the other businesses formed one business. In view of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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