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TMI Blog1982 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... he machinery, and the closing stock of Rs. 3,04,806. The assessee had to incur expenses for maintaining the Darwan, accountant and some other staff. It had also to incur expenses on postage and telegram, motor car expenses, rent, electric charges and sundry expenses. Such expenses resulted in a net loss from the business carried on by the assessee in the asst. yrs. 1973-74 to 1977-78. These expenses were allowed as business loss in these years. The case of the assessee, in all these years, was that the business activities have been temporarily stopped because of the dispute between the partners, and that it was never the intention of the assessee to stop the business altogether. In other words, the case of the assessee was that there was on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toto, and so he confirmed the disallowance made by the ITO. 5. Shri M.L. Bhakta ld. Rep. for the assessee, urged before me that the revenue authorities erred in their decision. He stated that the intention of the assessee firm remained always to start the business as soon as possible. He pointed out that in fact an arbitrator was appointed to bring the dispute to an end, and to enable the assessee to carry on its business; but unfortunately, one of the partners died in May, 1981. Hence, a fresh partnership deed dt. 17th July, 1981 between the two surviving partners had been executed and the matter is still under arbitration. He produced before me the profit and loss accounts relating to the asst. yrs. 1972-73 to 1978-79, to show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness was being carried on or not must depend in each case on its own facts. It is not necessary that a business to be in existence should have work all the time. There may be long intervals of activity and a concern may still be a going concern though it may, for some time, be quiet and dormant. In that case, it was held that the business was not discontinued even though there was no business activity in three consecutive assessment years. Then he referred to the decision of the Bombay High Court in the case of Hindustan Chemical. Works vs. CIT (1980) 124 ITR 561 (Bom), and stated that though the said case has gone against the assessee on the facts of that case, yet the principle laid down therein helps the case of the assessee before me. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but I do not find much force in the same. As has been held in the case of L. Ve. Vairavan Chettiar, the question raised in this appeal must depend on the facts of this very case. It is an admitted fact that the assessee was carrying on manufacturing and trading business during the asst. yr. 1972-73 and also has been held to doing so during the subsequent asst. yrs. 1973-74 to 1977-78 (both inclusive) even though in these five years there were no business activities in the form of purchase or sale. Hence, the normal presumption is that the business was still being continued in the same dormant state as in the preceding years. The factors on which the revenue has based its case do not stand the test of scrutiny in the light of the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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