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TMI Blog1988 (11) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdrawing the investment allowance to the tune of Rs. 51,754 by resort to s. 32A(5)(c) r/w s. 155(4A)(c) of the IT Act, 1961. (2) The Learned Authorities below have erred in not properly considering the submissions made on behalf of the assessee that on dissolution of partnership firm, distribution of assets cannot be termed as sale or otherwise transfer within the meaning of s. 32A(5). The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Madras High Court reported in South India Steel Rolling Mills vs. CIT (1982) 30 CTR (Mad) 1 : (1982) 135 ITR 322 (Mad) relying upon their earlier judgment reported in 117 ITR 930. It will be worthwhile to mention that in a subsequent decision reported in CIT vs. Balasubramanian (1982) 138 ITR 815 (Mad) the Hon'ble Madras High Court reported in 117 ITR 930 requires re-consideration in the ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d installed new machinery during the relevant previous year of the value of Rs. 2,07,017 on which investment allowance @ 25 per cent was claimed. As required under law the assessee had created a reserve for Rs. 39,000 for the purpose of making out the above claim for investment allowance. The firm was dissolved latter on 22nd Oct., 1972 and the assets and liabilities were distributed between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IT Act." 3. On appeal, it was held that according to the provisions of s. 32A(4) of the Act, such reserve had to be utilised only for the purpose of acquiring a new machinery for the business of the assessee within the next 10 years and if it is not done so or the reserve is distributed, it will be an Act of contravention. Accordingly, the Assessing Officer's order withdrawing the investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on dissolution of partnership firm investment allowance could not be withdrawn. 5. The Departmental Representative relied upon the order passed by CIT(A). 6. On going through the relevant judicial pronouncements, we find that issue is fully covered in favour of the assessee. We find that identical controversy was already decided in the case of Nipa Twisting Works and, therefore, we need no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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