LAWS(ALL)-1991-3-79

TARUN BHAI Vs. COMMISSIONER OF INCOME TAX

Decided On March 07, 1991
TARUN BHAI Appellant
V/S
COMMISSIONER OF INCOME-TAX Respondents

JUDGEMENT

(1.) UNDER section 256(1) of the Income-tax Act, 1961, the Tribunal has stated the following question for the opinion of this court :

(2.) THE assessee is an individual. During the accounting year relevant to the assessment years 1965-66, 1969-70, 1970-71 and 1971-72, he was carrying on the business of printing and publication as proprietary business up to May 31, 1972. On the plant and machinery employed in the said business, he claimed development rebate during the said year which was granted to him. THE said proprietary business was converted into a partnership business on and with effect from April 1, 1972. THE partnership consisted of the petitioner and his two sons wherein the assessees share was 1/3rd. THE Income-tax Officer held that inasmuch as there was a transfer of the said plant and machinery within a period of eight years, the assessee became disentitled to the said rebate and, accordingly, revoked the said benefit by passing orders under section 155(5) of the Income-tax Act. THE Income-tax Officer was of the view that there was a transfer of the said assets on the formation of the partnership. This view was questioned in appeal by the assessee but without success. THEn the matter was taken to the Tribunal which too disagreed with him and dismissed the appeal.

(3.) SUB-section (5) of section 155 provides precisely for such a situation. SUB-section (5) reads as under :