1966 (10) TMI 4

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..... rred are the following: " Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the purchase and sale of cashew and the manufacture of tin containers constituted two different businesses and 2. Whether, on the facts and in the circumstances of the case, the disallowance of Rs. 27,700, Rs. 28,212, Rs. 29,813, Rs. 32,123 and Rs. 44,000, representing the interest paid on capital borrowed for purposes of the business, is lawful? " The assessee commenced in the year 1944 a business, which consisted at the time of buying, processing and selling cashew-nuts. From the year 1946, he also engaged himself in the manufacture of tin cans for canning processed cashew-nuts at that time. Apparent .....

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..... was that cashew-nut and tin cans are different commodities. The question whether separate ventures or activities constitute one business or not, is as held by the Supreme Court in Setabganj Sugar Mills Ltd. v. Commissioner of Income-tax a mixed question of law and fact. The Supreme Court also laid down : " Certain principles are applied to determine whether, on the facts found, a legal inference can be drawn that the different ventures constitute separate businesses or viewed together, can be said to constitute the same business. These principles were stated by Rowlatt J. in Scales v. George Thompson Co. Ltd. The learned judge observed : '. . . the real question is, was there any inter-connection, any inter-lacing, any inter-dependen .....

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..... ed and the place of business are the same and if common accounts are kept, it may readily be inferred that the two lines of business are really part of the same business. . . But it is not to be assumed that all these features must be present in every case or that the absence of one or more of them is fatal to the claim that the different lines of business are really parts of the same business. " In the light of the first question referred, the history of the business, soon after the manufacture of tin cans commenced, is relevant. The Tribunal expressed itself thus : " Till 1948, the cashew-nut business and tin factory were looked after by a common manager. The staff was common to both. There was only one bank account. " For all the t .....

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