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TMI Blog1984 (5) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,975 which was paid by the assessee as penalty to the municipal corporation. Shri D. Agarwala, the learned departmental representative urged before us that the Commissioner (Appeals) erred in his decision. On the other hand, Shri Desai, the learned representative for the assessee, supported the action of the Commissioner (Appeals). 4. We find that the Commissioner (Appeals) has followed the order dated 29-9-1981 of the Tribunal in IT Appeal No. 2830 (Bom.) of 1980 wherein a similar point has been decided in favour of the assessee. Respectfully following the aforesaid decision, we uphold the action of the Commissioner (Appeals) on this point and reject this ground. 5. The only other ground in this appeal states that the Commissioner (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits. The ITO disallowed the claim on the only ground that the processing business was closed, and so the expenses could not be allowed because they related to a closed business. 6. The assessee appealed to the Commissioner (Appeals) and reiterated its claim. The Commissioner (Appeals) found that the assessee closed only one department, but carried on the business in other departments. He also found that the reason for closing the processing business was to prevent loss which was in the interest of the business which was continued. He referred to the decision in the case of Ambala Cantt. Electric Supply Corpn. Ltd. v. CIT [1982] 133 ITR 343 (Punj. Har.) for the proposition that the phrase 'for the purpose of the business' used in secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlaced with a common management and control, and that they were not independent business activities. He relied on the decision in the case of CIT v. Delhi Safe Deposit Co. Ltd. [1982] 133 ITR 756 (SC) in support of his contention. 9. We have considered the contentions of both the parties as well as the facts on record. As stated earlier in this order, there is no evidence to hold that the processing business was closed before the commencement of the previous year under consideration. On the other hand, the directors' report shows that the business was closed only during the year under consideration which means that the expenses under consideration were claimed while computing the income of a business which was carried on for some time dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer. In the case before us, there is no transfer of business, and the same assessee continued to do the business, even after the closure of one of the department of its business. Hence, the decision in the case of Gemini Cashew Sales Corpn. is not applicable to the facts of the case. Similarly, the decision in the cases of L. M. Chhabda and Ritz Continental Hotels Ltd. relate to cases where one independent business is closed and the expenses relating thereto was claimed against the income of another business. We have already found that the assessee before us was claiming the expenses against the business which was closed during the year, and not against another business. Hence, these two cases are also of no help to the department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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