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TMI Blog2012 (3) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... dis- tributorship and also maintained the establishment, thereby incurred the expenditure which were wholly and exclusively for the purpose of the business. This finding of the Tribunal is in tune with the order of the Division Bench in CIT v. S. S. M. Ahmed Hussain (1986 -TMI - 26098 - MADRAS High Court) Purchase of aluminum - Delayed Payment - Assessee contended TDS deducted and amount remitted to goverment account - Interest Expenditure of Rs 7,64,562 - Disallowance made Held That:- There is also no material to show that there was any compromise between the assessee and Nalco as to the payment of interest and by virtue of the agreement, paid the interest during the accounting year. No material were brought on record. - Decided against a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minium conductors for the relevant assessment year once for all and the assessee started distributor- ship to market certain different items of a sister company. In view of the above, he found that it cannot be said that the assessee had revived the old business for the purpose of claiming the benefit under section 71. The Commissioner also found that the interest expenditure of Rs. 7,64,562 for belated payment ought not to have been allowed, as the liability did not pertain to the relevant assessment year. In view of the above finding, the Commissioner was of the view that the order passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue. Therefore, he passed a revised order under section 263 rejecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee contended that the Tribunal had considered all the facts and circumstances of the case and ultimately came to the conclusion that the Commissioner of Income-tax had no jurisdiction to revise the order under section 263 of the Income-tax Act. She has further contended that there was only a lull in the business and, therefore, the Tri- bunal may also give a finding that the assessee is carrying on distributor- ship of certain items of the sister concern. It was also further contended that there are enough materials available on the record to show that the assessee is entitled to the relief on the merits. 6. We have heard the learned counsel for the parties and perused the documents available on record. The Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificates. While considering the said issue, the Division Bench found that there had been interconnection between the two business activities and merely because the purchase and sale of National Defence Remittance Scheme Certificates was ceased to be carried out, it cannot be held that the asses- see had ceased to carry on the business which he was originally carrying on in the assessment year 1967-68. 7. A careful reading of the said judgment shows that to approach the issues like this, the test is to find out whether the two business activities have any interconnection, interdependence and unity to show the existence of common management, common business organisation, common adminis- tration, common fund and a common place of business. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case on the merits. In view of the same, the Commissioner of Income-tax is wrong to that extent and the order of the Commissioner is set aside. 8. In respect of the other ground, viz., the assessee claimed interest expenditure of Rs. 7,64,562 is concerned, the assessee purchased aluminium from Nalco and was making regular payments to the purchaser and the Commissioner of Income-tax, in paragraph 11 of the order and also the annexure, held this issue as follows : "11. I am unable to agree with the learned submissions of the assessee for the following reasons : The assessee was purchasing aluminium from Nalco and was making regular payments towards purchases. The chart showing the date of invoice, the date of payment and the interest wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 CCS0561 29-4-1994 2,95,974 28-6-1994 14-3-1996 625 9 45,612 11 CCG1330 27-5-1994 13,95,493 6-11-1994 14-3-1996 642 9 2,20,908 12 CCG1368 28-6-1994 9,43,822 6-12-1994 14-3-1996 641 9 1,49,175 13 CCG1396 30-5-1994 2,87,884 14-6-1994 14-3-1996 639 9 45,359 Total 7,64,562 9. From a reading of the above, it is clear that there is a delayed payment. Therefore, the assessee had to pay 9 per cent. interest. But the learned counsel appearing for the assessee was unable to produce any material to show that the liability to pay interest accrued during the accounting year. The only argument advanced by the counsel was that the assessee deducted TDS and the amount was also remitted into Government account. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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