Law: Income Tax Act, 1922

Section: S 25 (4)

Income-tax Act (XI of 1922)----   ------- S 25 (4)-Applicability -Business-Succession-Relief admissible where business " as a whole" is transferred or succeeded.   In order that a person should be held to have succeeded another person in carrying on a business, profession or vocation, it is necessary that the person succeeding should have succeeded his predecessor in carrying on the business as a whole. Where a business is split up, and thereafter another person carries on part of the business, he cannot `succeed' his predecessor in carrying on the business.  JUDGMENT   AMIN AHMED, C. J.-This is a Reference under subsection (1) of section 66 of the Income-tax Act (to be hereinafter referred to in this judgment as the Act only) for the opinion of this Court on the following question   "Whether in the circumstances of the case there was a succes sion as contemplated under section 25 (4) of the Income-tax Act, and whether the assessee was entitled to relief under that section ?"   The facts of the case, as given in the letter of Reference are very scanty ; and fromthe Tribunal's order, dated the 22nd of November 1957, against the order of the Appellate Assistant Com missioner in respect of the assessment for the year 1947-48 it also appears that the material facts have not all been stated. However, we gather from this order, dated the 22nd of November 1957, the following facts.   The present firm Messrs Rampratap Suganchand came into existence and was registered under the Partnership Act on account of the deed of gift by Suganchand in favour of his two sons, Ramgopal and Kishorilal, on the 27th of May 1946. In 1929-30 and from that upto 1932-33 the assessment was made taking the status as that of an individual. From 1932-33 till and including 1946-47 assessment was made on the basis of a Hindu undivided -family though, for reasons best known to this firm (nothing appears from the record), they unsuccessfully tried to establish before the taxing authorities that the status of the firm for the purpose of assessment year 1946-47 was that of an indivi dual, and from the order, of the Tribunal Income Tax…