Law: Income Tax Act, 1961

Section: 256(1),155(5)(i),33,34,29

Section 33 read with sections 34 and 155(5) of the Income-tax Act, 1961 - Development rebate of - Assessment year 1965-66 - Assessee was a firm - It had claimed development allowance in respect of plant and machinery used in oil mills and coir factory and, same had been allowed - Subsequently under an agreement coir factory was given exclusively to one group of partners while oil mills was given to another group - Respective group took possession of same and continued to run business entering into separate deeds of partnership - ITO took steps under sections 155(5) and withdrew allowance earlier allowed - Whether since individual partners of firm had no exclusive interest in assets of firm transaction did amount to transfer and as such ITO was right in his action - Held, yes FACTS The assessee was carrying on business as mundy merchants and it also owned a cinema theatre, a rotary oil mill and a coir factory. Development rebate had been claimed by the assessee during the relevant assessment year in respect of plant and machinery used in the oil mills and coir factory under section 33 and the same had been allowed by the assessing authority. Subsequently, the partners of the firm entered into an arrangement whereby the coir factory was transferred exclusively in favour of one group of partners and the rotary oil mills belonging to the firm was transferred by all the partners in favour of other group of partners. By virtue of the above agreement, each group of partners became exclusive owner of the items of property which it took over under the arrangement referred to above. Thereafter, the partners who took over the items of properties under the arrangement referred to above, entered into separate deeds of partnership among themselves and some new persons in respect of those items of business. But the assessee-firm continued to carry on the business of talkies, etc. The ITO took action under section 155(5) to rectify the order of assessment relating to the relevant assessment year in view of the provisions of section 34(3)(b) as he was of the opinion that the machinery and plant in respect of which development rebate had been allowed, had been transferred by the…

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