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1 - 10 of 15 (0.80 seconds)Section 45 in The Income Tax Act, 1961 [Entire Act]
Section 234B in The Income Tax Act, 1961 [Entire Act]
A.L.A. Firm vs Commissioner Of Income Tax, Madras on 21 February, 1991
11. The Tribunal in the instant case has distinguished the decision of the Supreme Court in A.LA. Firm's case (supra) and held that in a case where the firm continues even after the transfer of assets there is no question of fixing the market value of the capital share and adding the profit as income exigible to tax. According to us, since the entire business of the firm was transferred to the company, the firm came to an end and consequently the principles laid down in the decision of the Supreme Court discussed above applied. The Tribunal has distinguished this decision only on the ground that in the present case the firm continued even after the transfer of the business as a going concern for the purpose of realisation of the dues. This view according to us is not correct.
Alapati Venkataramiah vs Commissioner Of Income Tax Hyderabad on 29 March, 1965
In fact this Court in F.X. Periera's case (supra) relied on the decision of the Supreme Court in Alapati Venkataramiah v. CIT (1965) 57 ITR 185 (SC).
G. R. Ramachari And Co. vs Commissioner Of Income-Tax, Madras. on 8 September, 1960
The Supreme Court observed that the decision of the Madras High Court in G.R Ramachari & Co. v. CIT (1961) 41 ITR 142 (Mad) squarely covers the situation. It is noted that the said decision held that the principle of valuing the closing stock of a business at cost or market price at the option of the assessee is a principle that would hold good only so long as there is a continuing business and that where a business is discontinued, whether on account of dissolution or closure or otherwise by the assessee, then the profits cannot be ascertained except by taking the closing stock at the market value. Comparing the situation of a firm which goes into liquidation where the stock-in-trade and other assets of the business will have to be sold and their value realised the Madras High Court observed that the position is not very different when the partnership ceases to exist in the course of the accounting year. It was further observed that the fact that Ramachari, one of the ex-partners, took over the entire stock and continued to run the business on his own, is not relevant at all when considering the profit or loss of the partnership which has come to an end. The Court then observed that it should, therefore, follow that in order to arrive at the correct picture of the trading results of the partnership on the date when it ceases to function, the valuation of the stock in hand should be made on the basis of the prevailing market price. The Supreme Court ultimately held that there can be no mariner of doubt that, in taking accounts for purposes of dissolution the firm and the partners, being commercial men, would value the assets only on a real basis and not at cost or at their other value appearing in the books.
Commissioner Of Income-Tax vs R. Ramalingair on 22 October, 1999
It has been held by this Court in R. Ramalingair's case (supra) that the levy of interest under Section 234B is automatic. In view of the above, there is no point in affording any opportunity to the assessee. Accordingly, we hold that the Tribunal was not justified in directing the AO to give an opportunity to the assessee on this aspect. Thus we answer question No. 3 referred at the instance of the Revenue also in the negative, i.e., in favour of the Revenue and against the assessee.