9911796707
TMI Blog1800 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... falls within the accounting year relevant to the assessment year 1957-58. The accounting period ended on March 31, 1957, During the relevant assessment year the assessee suffered a loss of ₹ 1,72,463/- from this mine. On March 14, 1957 the assessee took up a contract for raising coal from the colliery belonging to Central India Coal Fields Ltd. known as Khas Badjans Collieries. The said loss amounting to ₹ 1,72,463/ was sought to be carried forward for the purpose of deduction against future profits of the assessee's other venture under Section 24(2) of the Act. The Income Tax Officer refused to carry forward the said loss on the ground that the loss suffered by the assessee had arisen out of a business which had been aband ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee company to hold collieries as proprietors and also to do mining business which would include raising of coal on contracts. He further submitted that the same labour and staff which were running the Mundulpoor Mining business were diverted to the contract business of coal raisings from the colliery belonging to Central India Coal Fields Ltd. and, as such, the control and the structure of profit making in so far as the assessee was concerned were inter-dependent between the two businesses. 3. The short point to be decided In this case is whether the assessee's business under the contract of coal raising could be described as continuation of the assessee's coal mining business at Mundulpoor within the meaning of Section 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n future years against the profits or gains derived by the assesses from its business under the contract of coal raising provided that the assessee's coal mining business at Mundulpoor could be held to have been continued in the relevant assessment year; Or in other words, we shall have to find out whether the assessee's coal mining business and the assessee's business under the contract of coal raising could be described as different activities of the assessee's same business. In the instant case, the Tribunal has come to a finding that the two businesses of the assessee do not subsist at the same time end the assessee's business under coal raising contract was started after the previous business of coal mining at Mundu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined, the ultimate conclusion is a legal inference from proved facts, and it is one of mixed law and fact, on which depends the application of Section 24(2) of the Act. 6. Thus, it is clear that the sameness of the business activities of the assessee does not depend upon any casual or fortuitous connection. Applying the aforesaid test, we are of opinion that the assessee's business under the contract of coal raising cannot be described as the continuation of the assessee's coal mining business. It is nobody's case that the assessee company is not competent to carry on the business under the contract of coal raising from other collieries. The two ventures of the assessee's business may be perfectly permissible, under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arayana Rao, J. adopted the observations of Rowlatt, J. in (1927) 13 Tax Cas 83 (supra) it is difficult to follow how Rowlatt, J's observations could be made applicable to the facts of that case in favour of the assessee. In any event, the facts 'Of that case are clearly distinguishable from the instant case. There the assessee for the first time entered into dealings in forward contracts in the assessment year 1938-39. In the next accounting year relevant to the assessment year 193940 the assessee bought only ready goods and did not enter into forward contracts. Again in the accounting years for two assessment years 1940-41 and 1941-42 the assessee bought ready goods and also entered into forward contracts. Thus, this is not a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, namely: We have no hesitation in coming to the conclusion that the Celluloid business was entirely different from the other activities of the assessee company. The other activities were started only after the Celluloid business was closed. The accounts of the other activities were no doubt written up in the same books, but all it comes to is that the same set of books were continued after the close of the Celluloid business. When the other activities were started, there was no Celluloid business. In the said case also after the closing down of the Celluloid business the services of the same staff were utilized. On the facts found by the Tribunal, Chakravartti, J. has rightly come to the conclusion that the losses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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