COMMISSIONER OF INCOME TAX Vs. WELL PACK PACKAGING

JUDGEMENT

(1.) Delay condoned.

(2.) Revenue has filed this appeal. By the impugned order, the High Court has dismissed Tax Appeal No. 368 of 2001 filed by the revenue, by observing that no question of law much less substantial question of law arises from the order of the Income Tax Appellate Tribunal (the Tribunal) passed on 22-5-2001.

(3.) The respondent-assessee was a partnership firm. On 30-8-1995, it filed its original return of income in respect of assessment year 1995-96 declaring total income of Rs. 1,93,930. The said return was processed under Section 143(1)(a) of the Income Tax Act, 1961 (the "Act") on 29-1-1996. Subsequently, the assessing officer noticed that the assessee revalued the depreciable assets and enhanced the value at Rs. 1,28,13,831 on 31-7-1994. It was also noticed by him that the partnership firm was converted into a company under Chapter IX of the Companies Act, 1956 and was registered as such under Section 567 of the said Act on 17-10-1994. It was further observed that while the respondent had claimed depreciation value of the depreciated assets available on enhancement of the amount of revaluation on the date of conversion as capital gain though there was a transfer of assets from the partnership firm in the hands of the company which is a separate entity. Thereafter, proceedings under Section 148 of the Act for reassessment were initiated and thereafter a notice under Section 143(2) of the Act was issued. After considering the explanation of the respondent, the assessing officer determined the total income of the respondent at Rs. 1,30,07,761. The respondent disputed the impugned addition and filed an appeal before the Commissioner (Appeals) which was dismissed and the addition was confirmed.