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TMI Blog1985 (10) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... t big amount (approximately Rs. 50,000) towards security deposit and other amounts towards stall fees. The permission could be obtained only on deposit of these amounts. In the rules this permission is at some places described as licence and the two terms, permission and licence, appear to have been interchangeably used. In the above mentioned years the assessee had obtained necessary permission/licence and entered into transactions of bookmaking. 2. According to assessee he had temporarily supended these transactions in the accounting year relevant to the asst. yr. 1978-79 because of losses of earlier years so that he may get some breathing time and with the said income from other business resume these transactions. He resumed these tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person concerned has to apply for permission/licence to the concerned club. On requisite deposits being made, he gets permission/licence to enter into those transactions. This permission/licence is to be obtained for every season year. The assessee had applied for permission/licence for the season 1977-78 (asst. yr. 1978-79). However, the assessee gave second thought to the matter. On 2nd Nov., 1977 he addressed a letter to Secretary, R. W. I. T. C. Ltd., Poona, in which he mentioned that he had suffered heavy losses and as such he wanted to withdraw the application for permission/licence made for the season 1977-78. By letter dt. 15th Nov., 1977 he informed that he was not in a position to raise funds for making necessary deposits. He expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness". That portion reads as follows: "I find it impossible, therefore, to continue operating a book for the forthcoming Bombay Season 1977-78 and wish to terminate my business with immediate effect." The ITO has stated that the said expression indicated that business had come to an end. We do not agree with this interpretation. This letter is not written by a lawyer. It is written by a lay businessman. Hence the substance of what he says should be taken into account. The correspondence should be read as a whole. Immediately after the above passage he has written as follows: "I will still, however, try and gather all my resources and hope that I may be in a position to reapply for licence next year for the Poona, Bombay and Bang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the event in question was suspension of business transactions and not discontinuance of business. 8. Another aspect to which the ld. CIT(A) has referred is that since the application for permission/licence had been withdrawn by the assessee by letter dt. 2nd Nov., 1977, and since business in question could not be legally conducted without permission/licence, it should be presumed that the business had not continued. We are unable to agree. The inference whether business transactions remained suspended for a temporary short period or whether business itself was discontinued would depend upon all circumstances taken together. If the permission/licence was available without payment of large amount and yet if assessee decided not to obtain p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended to show that business itself was discontinued. It is to be noted that these very employees joined the assessee when the assessee obtained permission/licence in 1981. In the context of peculiar facts of this case, discharge of the said employees who had been employed on daily basis, would not be indicative of discontinuance of the business and would not be inconsistent with temporary suspension of business transactions. It is to be noted that if non-obtaining of permission/licence is treated as decisive circumstances in favour of conclusion of discontinuance of business, it would mean that in a business of this type, where permission/licence is required to be sought every year, there could never be any suspension of business transact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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