COMMISSIONER OF INCOME TAX Vs. DIZA ELECTRICALS

JUDGEMENT

(1.) HEARD counsel for the parties.

(2.) AT the instance of the Revenue, the Income-tax Appellate Tribunal, as directed by this court, referred the following questions relating to the assessment year 1988-89 (previous year being the calendar year 1987) for the opinion of this court :

(3.) SO far as the submission of learned senior standing counsel that the liability, in fact, was discharged by the private limited company, that is, the erstwhile partner of the firm, is concerned, we are of the view that the liability to pay sales tax did not exist against the erstwhile partner, but under an agreement this liability was discharged by the erstwhile partner, inasmuch as that partner had taken over the assets and liabilities of the assessee-firm. In this situation, discharge of liability by the erstwhile partner will be deemed to have been made for and on behalf of the assessee-firm and, therefore, it is the assessee-firm alone who can claim deduction.