9911796707
TMI Blog1989 (7) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. 3. As regards the first ground, the facts are that the assessee is a public company. Besides other activities, the company carried on the activity of manufacture of road and building construction machines. By an agreement dated 1-1-1979 the activity of manufacturing road and building construction machinery was transferred to one M/s. Acme Manufacturing Co. Ltd. The Income-tax Officer was of the opinion that the transfer was not legal nor in substance of a real transfer because of the following reasons : (1) The transfer was effected with a view to absorb the profit of the assessee from this activity against the losses of the transferee company. (2) This was a Tax Planning, which was not legal. (3) The agreement dated 12-1-1979 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the transferee company in view of the Bombay High Court decision in CIT v. Cotton Agents Ltd. [1957] 31 ITR 744, he deleted the addition made by the Income-tax Officer. 4. The revenue is in appeal before us against the above deletion. The learned Departmental Representative vehemently contended that the transfer recognized by the Commissioner of Income-tax (Appeals) was not a valid transfer under law. He emphasised that the immovable property could only be transferred by executing a registered conveyance deed, in the present case only on the basis of an agreement entered into between the parties, it could not be said under law that a valid transfer had taken place. He further urged that the director of the two companies were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring activity after the execution of this agreement of the company was carried on by the transferee company and not by the assessee. He submitted that the income arising from this activity had already been assessed in the hands of the transferee company and therefore, the same income could not be assessed in the hands of the assessee as this would be a case of double taxation which was impermissible under law. 5. Lastly he contended that this income could not be taxed under section 28 of the Act. As the said section clearly contemplated that the profits and gains of any business could be charged to income-tax only if the business was carried on by the assessee at any time during the previous year. In the present case since the business w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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