MEENU EQUIPMENTS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The question is as to whether the appellant assessee had contravened Section 155(4A) and/or Section 32A subsection (5) by reason of constitution of new firm comprising of all it's original partners except the deceased partner, and the widow of the deceased partner, which firm had taken over all the assets and liabilities of the firm which was dissolved on 26.10.1987 on the death of the father Balakrishna Pillai the founder of the firm that had been founded on 09.11.1976 and had comprised of himself, his three sons and his two daughters. After the demise of the father, the mother was included in his place and the remaining partners together with the mother constituted a new firm and continued to carry on the same business.

(2.) The firm as it existed between 1976 and 26.10.1987 till the assessment year 1987 had claimed and had been allowed investment allowance to the tune of Rs.5,80,454/-. It had made additions to the plant and machineries between 1981-82 and 1988-89, the value of such additions being 23,63,468/-. It had thus fully utilised full extent of the investment allowance that had been allowed within the period allowed by law.

(3.) The Deputy Commissioner of Income-tax, however, by an order made on 26.03.1993 which is captioned as an order under Section 155 of the Income-tax Act, withdrew the investment allowance that had been availed against the reconstituted firm on the ground that there had been transfer of assets and liabilities of the old firm to the new firm and therefore, section 155(4A) subclause (5) of Section 32A of the Act had been contravened.