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TMI Blog1979 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... nd delivered to the said trustees all properties, furniture, machinery, stock-in-trade and other properties and chattels and book debts of the business of Radhas Printers, Quilon and Cochin; Radhas Agencies, Quilon; Sangam, Changanacherry; Radhas, Kottayam; R.K.T. Reddiar Company, Bombay and Kunkumam Printers Publishers, Trivandrum, and others as going concerns on and from the 27th day of October, 1971, in consideration of the said trustees agreeing to discharge the liabilities, such assets and liabilities specifically described in a separate agreement entered into for assignment up to the trustees absolutely by the respective beneficiaries who are partners or minors admitted to the benefits thereof which in effect resulted in the transfer and assignment to the trustees, upon trust either by themselves or through their nominees the sums referred to in cl. 17 against their respective names ". Radhas Printers is the petitioner-firm. As contemplated by Ex. P-2 trust deed, the partners of the petitioner-firm by a separate deed, Ex. P-3, of the, same date assigned to the trustees the assets and liabilities of the firm. The assignment was with effect from November 1, 1971. Clause 1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch a transfer has been made by him, and no overt act except a declaration of trust is necessary. The capacity of the declarer of trust and his capacity as trustee are different and, after the declaration of trust, he holds the assets as a trustee. Under the Transfer of Property Act, there can be a transfer by a person to himself or to himself and another person or persons. In our opinion, there was in this case a transfer by Mr. Tulsidas Kilachand to himself as a trustee, though there was no formal transfer." In view of what is stated above it is not necessary to examine the submissions made by the learned counsel for the revenue seeking reliance therefor on the definition clause, s. 2(47), of the Act. On behalf of the petitioner, it was then contended that ss. 33(3) and (4) and 155(5) of the Act are unconstitutional. Subsections (3) and (4) of s. 33 provide that when two companies amalgamate, the amalgamated company shall continue to fulfil the conditions mentioned in s. 34(3), and so also, a company succeeding a firm. The bar on transfer is not by these provisions, but by s. 34(3)(b), and this provision is not impugned herein. How a striking down of s. 33(3) and (4) would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dismissed. No costs. JUDGMENT OF DIVISION BENCH The judgment of the court was delivered by GOPALAN NAMBIYAR C. J.-We are in agreement with the view taken by the learned judge and we think no interference is called for with his judgment. The appellant questions the correctness of the ITO's order withdrawing the development rebate granted to the appellant under s. 33(1) of the I.T.Act, 1961. The ground for withdrawal was that the appellant had transferred his assets and liabilities to one " N. R. Trust ". The ITO, accordingly, recomputed the income under s. 34(3)(b) and s. 155(5) of the Act and issued revised assessment orders, copies of which are Exs. P-4A to P-4F, for the years 1966-67 to 1971-72. These orders were confirmed on revision by the Commissioner of Income-tax-vide Ex. P-6. The question agitated is whether the conclusion that there was transfer of assets and liabilities was correct and was warranted in law. Exhibit P-2 dated October 27, 1971, is a copy of the trust deed constituting the trust. The founder of the trust is a partner in the assessee's firm. The trust comprised in all twenty beneficiaries. These included all the partners of the firm and some min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to the Government, a local authority, a corporation established by a Central, State or Provincial Act, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or (iii) where the sale or transfer of the ship, machinery or plant is made in connection with the amalgamation or succession, referred to in sub-section (3) or sub-section (4) of section 33. " Section 155(5), which is referred to in the above section, reads : " 155. Other amendments.-...... (5) Where an allowance by way of development rebate has been made wholly or partly to an assessee in respect of a ship, machinery or plant installed after the 31st day of December, 1957, in any assessment year under section 33 or under the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), and subsequently (i) at any time before the expiry of eight years from the end of the previous year in which the ship was acquired or the machinery or plant was installed, the ship, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government, a local authority, a corporation established by a Central, State or Provincial Act or Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-partner does not make a difference. Counsel for the assessee placed reliance on the decision of the Supreme Court in CIT v. R. M. Chidambaram Pillai [1977] 106 ITR 292, and, in particular, on the following observations (p. 300): " Contrary views are not wanting in some rulings, but a catalogue of cases on the other side may be productive of confusion and not resolution of conflict. We abstain from that enterprise and confine ourselves to the statement of the law that although, for purposes of the Income-tax Act, firm has certain attributes simulative of personality, we have to take it that a partnership is not a person but a plurality of persons." In the light of the above observations, it was the contention of the assessee that it would not be possible and permissible to regard the firm as having transferred its assets and liabilities under Exs. P-2 and P-3, as the firm is not a person. We do not think that the above observation of the Supreme Court is of assistance to the appellant in advancing this extreme contention. Counsel for the revenue stressed the decision of the Supreme Court in Tulsidas Kilachand v. CIT [1961] 42 ITR 1 at p. 6. The decision has been noticed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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