MANOHAR LAL AHUJA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petition under Article 226 of the Constitution prays for the quashing of a notice of attachment issued by the ITO, Kanpur, on April 22, 1972, under Section 226 of the I.T. Act, 1961, and for the refund of the sum of money attached thereunder.

(2.) M /s. L. K. Ahuja and Co. was a partnership firm. It was constituted in February, 1969. The accounting period of the firm was from 1st February to 31st January, of the next year. It had five partners, Kanhaiya Lal, petitioner No. 2 being one of them. Four minors, including Km. Ashu and Shankar Lal, whose guardians are petitioners Nos. 3 and 4, had been admitted to the benefits of the partnership. This firm was reconstituted on 1st September, 1970. Some of the partners retired and some new persons, including Manohar Lal Ahuja, petitioner No. 1, became partners in this firm. The petitioners allege that soon after its constitution, the firm took several contracts with the railway department for construction of buildings. When the firm was reconstituted in September, 1970, the work under these contracts was going on. The reconstituted firm took over the assets and liabilities of the previous firm, including the existing contracts.

(3.) THE petitioners' case is that in April, 1971, differences arose amongst the partners. The four petitioners formed one group, while the remaining partners, headed by Sri L. K. Ahuja, formed another group. The partnership firm is alleged to have been dissolved on April 30, 1971. Sri L. K. Ahuja formed a fresh firm with effect from May 1, 1971, from which the four petitioners were excluded. The remaining partners of the old firm along with six new persons became partners of the new firm, which also bore the name, L. K. Ahuja and Co.