Law:

Section:

Section 37(1) of the Income-tax Act, 1961 [Corresponding to section 10(2)(xv) of the Indian Income-tax Act, 1922] - Business expenditure - Allowability of - Assessment years 1949-50 and 1951-52 - On partition of country assets and liabilities of assessee's flour mill at Lahore were transferred to sugar mill in India - Assessee claimed deduction of interest paid in respect of liabilities of flour mill which was disallowed-Tribunal had found that there were two separate business-There was no finding of Tribunal that there existed common management, common business organization, common administration, common fund and common place of business, rather it had held that there was no inter-connection, interlacing and interdependence between two business-Whether having regard to aforesaid findings of Tribunal, it could be said that, two businesses did not constitute same business so as to justify allowance of interest - Held, yes. FACTS The assessee, a registered firm, operated a sugar mill in U.P. and flour mill at Lahore. The flour mill at Lahore was closed down at the time of the partition of the country, and assets and liabilities were transferred to sugar mill. For the assessment years 1949-50 and 1951-52 assessee claimed deduction, on account of interest paid in respect of these liabilities. The claim was disallowed by the Income-tax Officer on the ground that the liabilities related to the defunct business in Pakistan. He added the amounts of interests to the profits. On appeal, the Appellate Assistant Commissioner allowed the deduction. He took the view that the business at U.P. and that at Lahore were one and the same business. On revenue's appeal, the Tribunal held that the assessee was not entitled to deduction. On reference : HELD The Tribunal had clearly found that the mill at Lahore was a separate business from Sugar Mill at U.P. There was no finding by the Tribunal that there existed a common management, common business organisation, common administration, common fund and a common place of business. The Tribunal had further held that there was no interconnection interlacing, and interdependence between the two businesses. The considerations from which…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492