MOTOR SALES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the Income-tax Appellate Tribunal, Allahabad, referred the following questions for the opinion of this court :

(2.) THE facts, as briefly stated, in the order of the Appellate Tribunal are that the asses see-firm comprised three partners during the accounting period which was the calendar year 1972. A new deed of partnership was constituted with effect from August 3, 1972, whereby four new partners were admitted into the partnership and thus the number of the partners swelled to 7 from 3.

(3.) THE contention of the assessee before the assessing authority was that the entire income for the accounting period was liable to be taxed in the hands of the company. THE assessing authority, while rejecting the contention of the assessee-firm, held that the business of the firm was succeeded by the company and, therefore, the income of the period from January 1, 1972, to November 25, 1972, was liable to be taxed in the hands of firm and for the subsequent period the income was liable to be taxed in the hands of the company.