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TMI Blog1975 (12) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and 26 of the memorandum of association are the relevant clauses, though as usual under other clauses the company had the power to do each and every kind of business. Clause 10 permitted the company to buy, sell, import, export, manufacture, manipulate, treat, prepare and deal in merchandise, products, substances, commodities, articles and things of all kinds, and clause 26 permitted the company to manufacture and deal in all such stock-in-trade, goods chattels, etc. The company went into production in 1960. In 1959, the balance-sheet shows that fixed assets of the value of Rs. 9,55,980 were installed. This amount included amount spent for building under construction and machinery under erection. There was no manufacture of spare parts in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extent of Rs. 3,000 since the full details were not available in regard to this item. The following question has been submitted for our consideration in this reference : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing a sum of Rs. 27,159 as business expenses during the year of account ?" In my opinion, both the Tribunal's approach and conclusion are substantially unexceptionable. It has been observed by the Tribunal that there was no dispute that business activities had actually been commenced in the account year, and that there was also no dispute that the interest and the bulk of the other expenses were not incurred for the business of buying and selling spare parts. In the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it had suffered a loss of Rs. 3,71,700 in the sale of shares which the company claimed to carry forward and set off against the profits of subsequent years from transactions in other commodities. The Tribunal found that there was complete unity of control and shares were one of a number of commodities in which the company dealt in in the ordinary course of business and that there was no element of diversity or distinction or separateness about the transaction in shares, and, accordingly, upheld the claim. On a reference, the High Court held that the essential matter to be considered was the nature of the two lines of business and not merely their unity of control and that, therefore, the Tribunal erred in holding that the whole trading ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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