Commissioner Of Income Tax v. M/S Delhi Faridabad Textiles Pvt. Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No.885 of 2008Date of decision 22 .2.2010 Commissioner of Income Tax ... Appellant Versus M/s Delhi Faridabad Textiles Pvt. Ltd.... Respondent. CORAM:HON'BLE MR. JUSTICE M.M. KUMARHON'BLE MR. JUSTICE JITENDRA CHAUHAN Present:Ms. Urvashi Dhugga ,Advocate for the appellant. 1.To be referred to the Reporter or not ? 2.Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. The Revenue has approached this Court under Section 260 A ofthe Income Tax Act, 1961 (for brevity 'the Act') by filing the instant appealchallenging order dated 8.2.2008 (A.3) passed by the Income Tax AppellateTribunal, Delhi Bench, Delhi (for brevity 'the Tribunal') in ITA No. 3832(Delhi)/2003 in respect of assessment year 1985-86. The aforesaid order iscommon order which has also been passed by the Tribunal in penaltyproceedings in the case of the same assessee in ITA No. 1537 (Delhi)/2006for the assessment year 1985-86. Therefore, both the appeals bearing ITANo. 885 and 964 of 2008 are being disposed of by a common order. The assessee- respondent had been maintaining common booksof account, bank accounts and common funds. It continued to be managedby the same management. The workers and premises also continued to bethe same. Accordingly the findings of the Assessing Officer on the aforesaidissue were not reversed by the CIT(A). Even the Tribunal approved those ITA No. 885 and 964 of 2008 findings. Thus the categorical finding is that the business of the assessee-respondent remained the same. The test for determining the nature of thebusiness is whether the company continued under the same management,employed the same funds and used the same workers. The test is not whatitem the assessee has produced or in which item he has been dealing.Holding that community of funds, management and the work force is thekey test to decide whether the assessee continued to do the same business ornot, the Tribunal has held that the assessee- respondent would not beentitled to set off the losses of textile business against the chemicalbusiness within the prescribed time limit. Accordingly the matter has beenremanded back with a direction to the Assessing Officer to verify whetherthe losses claimed pertained to eight years as mentioned in Section 72(3) ofthe Act and allow the losses accordingly. Moreover, the matter has beenmerely remanded back to the Assessing Officer. Therefore, we find that noquestion of law much less a substantive question of law would arise fordetermination of this Court. The appeals are without merit and the same areaccordingly dismissed. A copy of this order be placed on the file of connected appeal. (M.M.Kumar) Judge 22.2.2010 (Jitendra Chauhan)Judge okg