9911796707
TMI Blog1952 (10) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... the 31st of July, 1942. It was admitted before the Appellate Tribunal that the only business carried on by the company consisted of manufacture and sale of sugar. This manufacture of sugar, it was again admitted, was stopped on the expiry of the lease on the 31st July, 1942. The sale, however, of the stock of sugar continued and the fact was admitted that this stock was sold off by the 30th November, 1942. The assessee company maintained its accounts on the mercantile basis and each year in computing its profits it showed the price of the sugar purchased as expenditure incurred and these figures were accepted by the Income-tax Department in assessing the profits of the company. It appears, however, that though accounts were maintained on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to claim the amount as an allowable expenditure under Section 10(2)(xv) of the Income-tax Act on two grounds: Firstly, that, as the company had not gone into liquidation and had not been wound up, it could not be said that it had ceased to carry on its business and the mere fact that it had no venture in hand would not matter and it must be deemed that this was a business expenditure. Secondly, that the company had incurred the expenditure in acquiring other business for which the company was negotiating and the mere fact that there was a period of lull between the termination of the old lease and the acquiring of the new lease would not matter. Neither of the two points urged by the learned counsel, however, appears to arise from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended that expenses after 30th November, 1942, and right up to 17th September, 1944, were incurred over staff maintained in making deferred payments of cane growers from whom cane had been purchased when the sugar factory was working and also other expenses identical to that payment and so much expenses should have been allowed by the Income-tax Officer in the assessment years 1943-44 and 1944-45. This being the only expenses claimed, we fail to see why the Tribunal added in the last part of the reference:- and for looking after the affairs of such company during the period of its lull before any other business is started. It does not appear from the order of the Appellate Tribunal or from the statement of the case that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en it is waiting to acquire a new business, or when it is prospecting for business that is going to be started, and in such a case it may be possible to say, though it is not necessary for us to express any opinion on the point, that the assessee was still carrying on business. On the facts admitted by learned counsel that question does not arise in this case. It was admitted that the business activities that the assessee was carrying on had ceased. The mere fact that he had maintained a staff to pay some of the cane growers from whom he had purchased cane on credit cannot be said to be an expenditure incurred wholly and exclusively for the purpose of the business. We have pointed out that the last part of the question does not arise in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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