1966 (7) TMI 15

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..... x Act, 1922. The question referred to us is in these terms: "Whether, on the facts and in the circumstances of the case, the order passed under section 26(2) of the Income-tax Act, 1922, for the assessment year 1957-58 is justified in law ? " Section 26(2) of the Income-tax Act, 1922, provides in certain cases for an assessment being made on the person succeeding another who has been carrying on .....

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..... efore us that all the conditions necessary except the one which speaks of " cannot be recovered from him " have been satisfied in this case. As far as this condition, which is a condition precedent in order that the proviso may be applied against the successor, is concerned there is keen controversy and it is urged by counsel on behalf of the assessee that the Tribunal has erred in applying the pr .....

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..... d a net wealth of Rs. 3,73,903 but the point to be seen is whether the tax could be recovered from Damodaran. It is not the existence of assets but the hard fact whether the department could recover the tax dues from this person. If every effort made by the department fails and if an assessee goes on denuding himself of all valuable assets, it can truly be said that taxes could not be recovered fr .....

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..... which it is possible to find that the conclusion has been reached not merely on this observation but on the materials available before it as to the availability or otherwise of the assets, we would have answered the question in favour of the assessee. We do not think we can do so on the facts as they are seen from the papers before us. We may as well refer to what the Income-tax Officer in his or .....

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..... n timber and transport. " In the statement of facts of this case, in paragraph 4, these facts are mentioned. These indicate that it is extremely doubtful whether there were assets available with the said Damodaran who transferred his business to the company which is now being proceeded against for the tax. In these circumstances, we do not think that the proviso has been pressed into service wit .....

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