TMI Blog1992 (8) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the tax payable by the firm itself on the basis of the total income of the firm ; or (b) if, in his opinion, the aggregate amount of the tax payable by the firm if it were assessed as a registered firm and the tax payable by the partners individually if the firm were so assessed would be greater than the aggregate amount of the tax payable by the firm under clause (a) and the tax which would be payable by the partners individually, may proceed to make the assessment under sub-section (1) of section 182 as if the firm were a registered firm ; and, where the procedure specified in this clause is applied to any unregistered firm, the provisions of sub-sections (2), (3) and (4) of section 182 shall apply thereto as they apply in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 3 partners did not have any other source of income. The Assessing Officer, therefore, activated section 183(b) of the Act and opined that in the interest of Revenue it was necessary to grant registration to the partnership firm for this year. Accordingly after determining the loss he allocated the loss among the partners according to the provisions of section 67 of the Act. For the purpose of such decision he relied upon the decision of the Supreme Court in the case of Sarupchand Hukamchand Co. v. Union of India [1959] 37 ITR 81. In appeal filed by the assessee it was contended that the decision of the Supreme Court relied upon by the Assessing Officer was in fact in favour of the assessee. Besides the Assessing Officer exceeded his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory the controversy was only academic. 4. On going through the decision rendered by the Supreme Court in the case of Sarupchand Hukamchand Co. we find that the controversy was slightly different, though certain observations made are useful of application to the facts and the controversy in this case. In this case what happened was that in assessment years 1940-41, 1941-42 and 1942-43, the assessee's application for registration of the firm under section 26A of the Income-tax Act, 1922 was rejected and therefore, the firm had to be taken admittedly as URF. In assessment year 1940-41 the assessee had declared loss in the return but the same was converted into positive income on assessment. For subsequent two years the assessee had dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order which he passed for modifying the assessment ; and (iii) the Assessing Officer was under a duty to determine once again whether in the altered circumstances he would apply section 23(5)(b). 4.1 From the above it is quite clear that nothing is clearly held by the Supreme Court that position in the subsequent assessments had to be ignored for the purpose of decision in accordance with section 183(b) of the Act. This was so because this point was not argued at all. But the facts being identical, it can safely and reasonably be inferred as is canvassed by Mr. Aggarwal. Therefore, in our opinion the Assessing Officer could not take into consideration the returns of subsequent two assessment years. 4.2 Moreover now that decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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