Law:

Section:

Section 41(2) , read with section 45, of the Income-tax Act, 1961 [Corresponding to section 10(2)(vii), read with section 12B, of the Indian Income tax Act, 1922] - Balancing charge - Assessment year 1949-50 - Assessee firm entered into agreement to sell to transfer its business and assets as going concern to a company and on next day a sale deed was exemted - ITO brought to tax difference between original cost of assets and their written down value under section 10(2)(vii) of 1922 Act and also amount representing excess of sale price of assets over their original cost as capital gains under section 12B of 1922 Act - Assessee contentded that firm was dissolved on date of agreement to sell and that sale to company on next day was by individual partners of dissolved firm and not by firm as such and that inasmuch as assets were transferred by assessee to company, and persons constituting assessee were also shareholders of company, it could not be said that any sale insense in which that term was understood in commercial circles, had taken place said contortions were rejected by ITO-AAC and Tribunal upheld order of ITO - Whether since party to agreement to sell was assessee and not its partners as individuals and agreement plainly showed that business was transferred as going concern, it could not be said that firm was dissolved at all at time when its business and assets were transferred to company - Held, yes - Whether since Tribunal gave no finding of fact as to whether there was virtual identity between shareholders of company and partners of assessee, principle invoked by assessee could not be applied and, therefore, sum being difference between original cost and written down value of assets was chargeable under section 10(2)(vii) of 1922 Act - Held, yes - Whether since assessee was not dissolved on date of sale and there was no distribution of its capital assets between partners, third proviso to section 12B of 1922 Act did not apply and, therefore, amount representing excess of sale price over original cost of assets was chargeable as capital gains under section 12B of 1922 Act - Held, yes FACTS The assessee, a firm consisting of six partners, carried on…

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