9911796707
TMI Blog1987 (2) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... g the period relevant to the assessment year 1975-76, the assessee entered into an agreement dated October 15, 1973 (annexure E), with certain persons. In terms of that agreement, the business carried on by the assessee was transferred to the second party to the agreement on certain conditions. Two of the conditions alone are relevant for the purpose of this case. They are contained in clauses 6 and 7 which read as under : " 6. The party of the first part hereto further agrees to assist and render such services as may be necessary to retain the agencies and customers and guide the party of the second part from time to time to maximise the business of the party of the second part. 7. In consideration of the above, the party of the seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, the Tribunal held that although the business was transferred, the assessee did not cease to do business, as is clear from the terms of the instrument under which the business was transferred. The Tribunal further held that the amount found to have been received by the assessee represented its business income and that the assessee was entitled to retain the registration. The question is whether the assessee continued as a firm even after the transfer of the business so as to retain its registration under the Income-tax Act, 1961, during the relevant year. Relying upon the decision of the Madras High Court in K. Viswanathan v. Namakchand Gupta, AIR 1955 Mad 536, counsel for the Revenue submits that existence of business is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .25 per cent. of the turnover of the transferee. That is the basic fact found by the Income-tax Officer and with which the Commissioner did not interfere. Without interfering with that finding, the Commissioner concluded that no business was carried on by the assessee during the relevant year. That was a perverse finding because it was unsupported by evidence and directly opposed to the clear finding of the Income-tax Officer. The Tribunal, in our view, Tightly accepted the facts found by the Income-tax Officer and rightly rejected the unsustainable finding of the Commissioner. The conclusion reached by the Tribunal is well founded. In the circumstances, we answer the question in the affirmative, that is, in favour of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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