| Case ID |
31a5f49b-2493-4826-80cd-ef380762769d |
| Body |
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| Case Number |
IT REFERENCE No. 56 OF 1965 |
| Decision Date |
Dec 21, 1970 |
| Hearing Date |
|
| Decision |
The court held that there was no succession to the business as the partnership had not ceased to exist. The mere reconstitution of the firm by adding new partners did not constitute a succession under section 25(4) of the Indian Income-tax Act, 1922. The claim for relief under this section was rejected as the partnership continued to operate despite changes in its constitution. The case was decided in favor of the revenue, affirming the decision of the Income Tax Officer and the Appellate Assistant Commissioner. |
| Summary |
This case revolves around the interpretation of section 25(4) of the Indian Income-tax Act, 1922, concerning the succession of a business after the dissolution of a joint Hindu family. The Punjab and Haryana High Court assessed whether the changes in partnership constituted a succession that warranted tax relief. The court concluded that the partnership continued without ceasing to exist, and thus, the claim for relief was denied. This ruling reinforces the understanding of business continuity and the requirements for claiming tax benefits under succession laws. The decision highlights that mere changes in partnership do not equate to succession, emphasizing the need for clear cessation of the previous entity. This case serves as a crucial reference for tax professionals and legal practitioners involved in income tax litigation, especially concerning partnership structures and business succession. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
Not available
|
| Judges |
D. K. Mahajan,
Bal Raj Tuli
|
| Lawyers |
D.N. Awasthy,
B.S. Gupta,
Bhagirath Das,
B.K. Jhingan,
S.K. Hirajee,
S.S. Mahajan
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Hans Raj
|
| Citations |
1972 SLD 471 = (1972) 85 ITR 412
|
| Other Citations |
Bhagwanji Morarji Goculdas v. Alembic Chemical Works Co. Ltd. [1948] A.I.R. 1948 P.C. 100,
Commissioner of Income-tax v. A.W. Figgies & Co. [1953] 24 ITR 405 (SC),
Commissioner of Income-tax v. P. E. Polson [1945] 13 ITR 384,
Dulichand Laxminarayan v. Commissioner of Income-tax [1956] 29 ITR 535; [1956] SCR 154 (SC),
Hoshiarpur Electric Supply Co. v. Commissioner of Income-tax [1971] 79 ITR 641 (Punj.),
Jabalpur Ice Manufacturing Association v. Commissioner of Income-tax [1955] 27 ITR 88 (Nag.),
Kotha Govindarajulu Chettiar v. Commissioner of Income-tax [1944] 12 ITR 97 (Mad.),
Meyyappa Chettiar (O. Rm. M. Sp. S. V.) v. Commissioner of Income-tax [1943] 11 ITR 247 (Mad.),
Sait Nagjee Purushotham & Co. v. Commissioner of Income-tax [1964] 51 ITR 849 (SC),
Shand, In re: Exparte Corbett [1880] L.R. 14 Ch.D. 122
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
176,
25(4)
|