9911796707
TMI Blog1999 (11) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm ?" The factual position, as set out in the statement of case, is as follows : The assessee, a firm, was engaged in contract works with the Kerala State Electricity Board (in short, "the Board"). It was dissolved by a deed of dissolution dated October 1, 1970. During the accounting period relevant to the assessment year 1976-77, a sum of Rs. 1,16,000 was received from the Board on the basis of the arbitration award in respect of the work done earlier. The Assessing Officer issued a notice under section 148 of the Act to the assessee, as the amount was, according to him, assessable under section 41(1) of the Act. The assessee filed a "nil" return along with a covering letter stating that since the firm was already dissolved, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials on record in the proper perspective and misconstrued the terms of the deed of dissolution dated October 1, 1970. Learned counsel for the assessee, on the other hand, submitted that on a bare reading of the deed of dissolution, it is clear that the award cannot be brought to tax at the hands of the firm. The Tribunal seems to have proceeded on the footing that the award dated February 21, 1973, cannot be traced to any dispute pending on the eve of dissolution and, therefore, the award passed had given rise to an income only on the date of the award. Certain facts are to be noted as they have great relevance. The deed of dissolution has been quoted in its entirety by the Tribunal. Clauses 4 and 5, which are relevant, read as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard amount was not relatable to the work done earlier and was "further work" as referred to in clause 5 of the deed of dissolution, the amount was shared by the partners of the firm. This falsifies the assessee's stand that the award was for "further work". Had that been so, in terms of clause 5, the entire amount of the award would have gone to Sri P. M. Paily Pillai and not to all the partners. The income from the date of award, which the Tribunal has considered to be a fortuitous circumstance, in reality, is the pivotal point for determination. Section 176(3A) of the Act reads as follows : "(3A) Where any business is discontinued in any year, any sum received after the discontinuance shall be deemed to be the income of the recipient an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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