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TMI Blog1943 (6) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 4, 1938, by which, in consideration of a sum of one lac of rupees, the company obtained immovable properties consisting of land, buildings, fixed machinery and other immovable properties of the mill and press and other legal incidents together with the good-will of the business and the right to use the name of Krishna Mill and Press and benefit of all contracts and all legal incidents of the Krishna Mills. The company has carried on that business ever since it was acquired on March 4, 1938. On June 10, 1939, a notice was served upon the company under Section 34 (1) of the Income-tax Act in respect of an assessment which' should have been made in the year 1938-39. On August 20, 1940, the assessment was completed and the company was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company), of ₹ 5,354/-. From this it is argued that the company did not succeed to the firm as it :did not take over its hemp business. What the reasons were for this sum being deducted does not appear. By the sale deed of March 4, 1938, which was executed by the company and in respect of which according to the deed, one lac of rupees was paid, the company acquired all the immovable properties including land, buildings, machinery, and so on, together with the good-will of the business and the right to use the name of Krishna Mills and Press and the benefit of all contracts and legal incidents. Whilst one item of gross profit was omitted, in my view that is not sufficient to show that the company are not the successors to the firm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the year 1940-41, although it is in respect of the year 1938-39, and since the substituted Section 26 (2) was in force at the time the assessment was made, its provisions should apply. Consequently the applicant company should only be assessed in respect of the period during which it carried on the business and should not be assessed in respect of the whole of the profits for the year prior to the year 1938-39. It is conceded that the assessment has been made under Section 34 (1) of the Income-tax Act, which is known as the escaping section. So far as is material, the section provides as follows:- If in consequence of definite information which has come into his possession the Income-tax Officer discovers that income, profits or ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income-tax which he should have paid had the assessment been made during the correct period. From this, in my view, it must follow that the as-sessment made in a subsequent year must be the same as the assessment would have been, had it been made in the correct year. The fact that legislation has changed meanwhile does not in my view alter the circumstances. The assessment from which the company escaped in 1938-39 was an assessment in respect of the whole of the profits of the business to which it succeeded and which were made during the year of account, namely, the income-tax year immediately prior to the year 1938-39. Attention has been drawn by the learned Advocate on behalf of the company to the concluding words of Section 34 (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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