1980 (11) TMI 1 - HC - Income Tax

Summary

The High Court of Madras dismissed the Commissioner of Income-tax's petition to refer a question of law regarding the withdrawal of development rebate in a case where a sole proprietor converted the business into a partnership firm. The court relied on the principle established in Kanniah Pillai v. CIT [1976] 104 ITR 520 that no transfer of assets occurs in such a conversion. The petition was rejected as no referable question of law arose from the Tribunal's order. The court also noted that the Supreme Court's decision in Malabar Fisheries Co. v. CIT [1979] 120 ITR 49 did not change the legal position established by the earlier Madras High Court ruling.