9911796707
TMI Blog1994 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... section 34(3)(b) of the Income-tax Act, 1961 ? " The assessee-firm was constituted under a deed of partnership dated October 29, 1969, consisting of two partners, viz., (i) Husainbhai Ahmedali Nalwala, and (ii) Aftabbhai Nalwala. The business activities of the assessee firm were two fold, i.e., purchasing and reselling of plastic cloth and manufacturing of different kinds of plastic cloth in the firm name and style of Asmaco, having the factory at Thane. Under a deed of partnership dated November 14, 1975, a partnership firm comprising the said Hussainbhai Ahmedali Nalwala, the said Aftabbhai Nalwala and one H. A. Nalwala Family Trust as partners therein was constituted in the firm name and style of " Asmaco Plastic Industries " on the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being aggrieved by the withdrawal of the development rebate by the Income-tax Officer, preferred an appeal before the Commissioner of Income-tax (Appeals), which was rejected. The assessee-firm, thereafter, filed a further appeal before the Income-tax Appellate Tribunal (for short, "the Tribunal"), which also was rejected. It is in these circumstances that the reference has been made to this court at the instance of the assessee-firm. Mr. Bhujle, learned counsel appearing for the assessee-firm, has submitted that the assessee-firm did not sell or otherwise transfer the machineries on which the development rebate of Rs. 50,305 was initially allowed by the Income-tax Officer in the assessment year 1975-76 within the meaning of section 34(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22), in respect of that ship, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act, and the provisions of sub-section (5) of section 155 shall apply accordingly : ..... " The words used in section 34(3)(b) have been " sold or otherwise transferred by the assessee ". These words make it clear that the sale or transfer would entail withdrawal of rebate only where it was voluntarily made by the assessee. The word " sold " in section 34(3)(b) has no special definition but has been understood in its legal meaning as defined in section 54 of the Transfer of Property Act, 1882. The expression " transfer " has been defined in section 2(47) of the Act. As per section 2(47) of the Act, " transfer " in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the debts, liabilities and obligations of the old firm. " As per clause 4 above, all assets including the machineries in respect of which the liabilities of the assessee-firm (described therein as the " old firm ") are taken over by and vested in the partnership-firm carrying on business in the firm name and style of " Asmaco Plastic Industries " with effect from November 4, 1975. Hence, the machineries in respect of which development rebate was granted to the assessee-firm during the previous year relevant to the assessment year under consideration became the assets of the partnership-firm of " Asmaco Plastic Industries " with effect from November 4, 1975. The said firm of " Asmaco Plastic Industries " is a separate firm from the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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