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TMI Blog1989 (1) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 271(1)(iii) of the Income-tax Act, 1961, in respect of the amount received by way of refund of sales tax paid by the firm. The relevant assessment year here is 1968-69. To give the factual background, in 1958, the firm, Behari Lal Piarey Lal, consisted of three partners, namely, Piarey Lal and his two sons, Lachhman Dass and Sat Parkash. Piarey Lal died on February 18, 1960, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his amount, when received, was credited in equal shares to the account of the two partners, namely, Lachhman Dass and Sat Parkash. It was not, however, shown in the return either of the firm or of the two partners. On October 14, 1968, the said amount of refund of Rs. 4,500 was treated by the Income-tax Officer as deemed income of the firm under section 41(1) of the Act as also Rs. 2,250 each, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. When the case went back to the Tribunal for decision on merits, the Tribunal, by its order of October 9, 1971, deleted the penalty against the firm and, by a separate order on the same day, also against the two partners. A reference was then sought by the Revenue which was allowed in the case of the firm, but declined in respect of the partners. In the reference with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e affirmative, in favour of the assessee and against the Revenue. Keeping in view the definition of "person" as given in section 2(31) of the Act, it will be seen that it includes a firm too which means that a firm will succeed a firm while its partners in their individual capacity are separate and distinct assessees In the present case, deductions in respect of liability for sales tax were allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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