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TMI Blog1965 (11) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... siness at the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939). The High Court was, therefore, in our judgment, right in holding that the assessee was entitled on the dissolution of that firm in March, 1943, to the benefit of section 25(4) of the Indian Income-tax Act. Appeal dismissed. - - - - - Dated:- 19-11-1965 - Judge(s) : S. M. SIKRI., K. SUBBA RAO., J. C. SHAH JUDGMENT The judgment of the court was delivered by SHAH J.----Hakam Mal Tani Mal, a Hindu undivided family, was assessed to tax under the Indian Income-tax Act, 1918, in respect of income from business, inter alia, in timber, at Abdullapur. In 1934 there was a partition of the Hindu undivided family, and five members of that family ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 939, and that firm alone was entitled to relief under section 25(4) and to the second succession which took place on April 1, 1943, after Act 7 of 1939 was brought into force, relief under section 25(4) was not admissible. The Income-tax Appellate Tribunal agreed with the view of the Appellate Assistant Commissioner. Thereafter as directed by the High Court of Punjab under section 66(2) of the Indian Income-tax Act, 1922, the Tribunal drew up a statement of the case and submitted the following question of law for the opinion of the High Court: " Whether, on the facts and the circumstances of the case, the Tribunal is correct in law in holding that the assessee-firm (R. B. Jodha Mal Kuthiala, Abdullapur Depot, Simla) was not entitled to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference: Provided. . . " There is no dispute that the Hindu undivided family of Hakam Mal Tani Mal was taxed under the Indian Income-tax Act, 1918, in respect of the timber business and Messrs. Hakam Mal Tani Mal succeeded to that business in 1934. Accounts of Messrs. Hakam Mal Tani Mal were settled on March 31, 1939, and the business in timber which was carried on by that firm was taken over by the assessee. The departmental authorities held that the assessee was at the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), not carrying on business, and that it succeeded to the business on April 1, 1943. The High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la Hakam Mal Tani Mal, Simla, and all the partners of the firm, Lala Hakam Mal Tani Mal, understood and settled their accounts up to the 31st of March, 1939, on the 31st of March, 1939, and all the partners have become separate from the 1st of April, 1939, and the business at Abdullapur in the name of the firm, Hakam Mal Tani Mal and R. B. Jodha Mal Kuthiala, has fallen to our share to run which we have by means of an oral agreement constituted a separate partnership styled R. B. Jodha Mal Kuthiala, Abdullapur, from the 1st of April, 1939. Now the said oral (agreement) is being reduced to writing and we agree that . . . ." The instrument of partnership in the first instance recites that the accounts of Messrs. Hakam Mal Tani Mal were set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be held that the business of Messrs. Hakam Mal Tani Mal continued till the midnight of March 31, 1939, and immediately thereafter the business of the assessee commenced. The partnership therefore came into being at the precise point of time at which the Indian Income-tax (Amendment) Act (7 of 1939) came into force and it could not be said that the assessee was not carrying on business at the commencement of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939). The High Court was, therefore, in our judgment, right in holding that the assessee was entitled on the dissolution of that firm in March, 1943, to the benefit of section 25(4) of the Indian Income-tax Act. The appeal fails and is dismissed with costs. Appeal dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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