9911796707
TMI Blog1978 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant time, pertaining to the assessment year 1959-60, the firm, Messrs. Vijay Chitra Mandir, Poona, was doing film exhibition business. This firm (hereinafter referred to as Chitra Mandir) had four partners till March 11, 1958, the assessee having one-fourth share. One of the partners died on March 11, 1958, and the surviving partners established a new firm in which the assessee had, one-third share. For the material assessment year, one-third share of profits came to Rs. 10,692. There was another firm by name Vijay Enterprises alias Hind Vijay at Poona, also doing film exhibition business. For the sake of convenience that firm is called Hind Vijay. It was running in loss and was dissolved on September 6, 1955. The assessee was a partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arising for determination would turn on whether the assessee continued to carry on in the material years the business in which the losses were incurred in the assessment years 1955-56 and 1956-57. The Tribunal held that a firm is a taxable unit under the I.T. Act and the question whether the two firms carry on the same business would depend on the facts of the case. The Tribunal pointed out that the two firms in which the assessee was a partner do not even have the same constitution and they were clearly different entities. They did the same type of business, but cannot be doing the same business, even though there was a common manager for both the cinemas and there was some co-ordination in the arrangement for obtaining films from distrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the test that has been laid down by the Supreme Court does not justify the contention that has been sought to be urged on behalf of the assessee. So far as the facts are concerned, there is no controversy. Both the firms, viz., Chitra Mandir and Hind Vijay, carry on film exhibition business. So far as the business of Hind Vijay was concerned, there were unabsorbed losses to the extent of Rs. 26,383 as stated above, while so far as the business of Chitra Mandir was concerned there were profits. Both of them were partnership firms, in which the assessee was one of the partners. From the order of the Tribunal it is quite apparent that it was not even controverted that both the firms did the same type of business, had a common manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was of taking contracts in respect of or dealing in bidi leaves and this business he could do either individually or in partnership with someone else. The fact that firm A was dissolved on March 31, 1955, did not mean that his business in bidi leaves came to an end so long as he continued to do that business either individually or in partnership with others. The business of the respondent which consisted of dealing or taking of contracts in bidi leaves did not depend on the constitution of a partnership through which it was carried on nor could it come to an end so long as the respondent carried on the same systematic course of activity. The business in which the loss had been sustained by the respondent when he was a partner of firm A whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the profits of a subsequent year or years, only if such profits accrued to the assessee from the same business. The question whether an assessee is carrying on the same business is a mixed question of law and fact as it has to be decided on the application of various tests in so far as they may be applicable. The words " same " and " similar " connote different concepts and, therefore, the carrying on of a similar business will not meet the requirements of the section. If one business cannot be conveniently carried on after the closure of the other, there would be a strong indication that the two businesses constituted the " same " business; but no decisive inference could be drawn from the fact that after the closure of one business an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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