COMMISSIONER OF INCOME TAX Vs. GUPTA ENGINEERING WORKS

JUDGEMENT

(1.) THE following questions of law, arising out of order dated 12.5.1993 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short, 'the Tribunal') in I.T.A. Nos.1211 to 1215/Chandi/1987, for the assessment years 1977 -78 to 1981 -82 have been referred for opinion of this Court:

(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in law in holding that Section 154 of the Income Tax Act was not attracted and the matter squarely fell Under Section 155(4A) of the Act, though it was a case where the Assessing Officer had only made a wrong mention of Section 154 in his order?

(3.) WE have considered the rival contentions and we find that it is a case where entire assets and liabilities have been transferred from the firm to the new company. The ld. D.R has, however, invited our attention to even of assets which remained with one partner Veena Gupta. He has argued that since some property remained with the partner, it has not a case where the entire assets and liabilities could be treated to have been taken over by the new company and, therefore, the conditions laid down Under Section 32A(7) were not fulfilled. We, however, find that the asking over agreement dated 1.12.1981 was clear in terms and there is no room for any doubt that running business of the firm was taken over long with its assets and liabilities. It has also to be noted that proceedings were initiated Under Section 154, which did not appear to be the appropriate provision. The ld. Counsel was argued that Section 155(4A) could be applied because it was that sub -section which was attracted to such a situation. He has invited our attention to the order of the Tribunal dated 7.2.1992 in I.T.A. No. 342/Chandi/88 for assessment year 1982 -83 in the case of the assessee itself wherein it has been held that such a matter did not come within the ambit of Section 154. Reliance was placed on a Decision of the Hon'ble Supreme Court in the case of Volkart Brothers and Ors. (). In that case, it has been held that where the mistake was something which was to be established by a long drawn process of reasoning on points on which there may be conceivably two opinions, it could not be called to be a mistake apparent on record. It has thus been argued that the application of Section 154 was misplaced one.