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31. Business when treated distinct and separate
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31. Business when treated distinct and separate.—(1) A business shall be distinct and separate from another business if there is no interlacing or inter-dependence between the businesses.
(2) A business shall be deemed to be distinct and separate from another business, if—
(a) the unit of the business is processing, producing, manufacturing or trading the same goods as in the other business and such unit is located physically apart from the other unit ;
(b) the unit of the business is processing, producing or manufacturing the same goods as in the other business and utilises raw material or manufacturing process, which is different from the raw material or the manufacturing process of the other unit ;
(c) separate books of account are maintained or capable of being maintained, for the business ; or
(d) it is a business in respect of which profits are determined under sub-section (2) of section 32.
(3) A speculative business shall be deemed to be distinct and separate from any other business including other speculative business.
Clause 31 seeks to provide that a business shall be distinct and separate from another business if there is no interlacing or inter-dependence between the businesses. It further provides that a business shall be deemed to be distinct and separate from another business, if—
(a) one unit of the business is processing, producing, manufacturing or trading the same goods as in the other unit of the business and the first-mentioned unit is located physically apart from the other unit ;
(b) one unit of the business is processing, producing or manufacturing the same goods as in the other unit of the business and the first mentioned unit utilizes raw material or manufacturing process, which is different from the raw material or the manufacturing process of the other unit ;
(c) separate books of account are maintained or capable of being maintained, for any business ; or
(d) it is a business in respect of which profits are determined under sub-clause (2) of clause 32.
The said clause also provides that a speculative business shall also be deemed to be distinct and separate from any other business or any other speculative business.
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