TMI Blog1997 (7) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... f the answer to the above be in the affirmative--- Whether the Tribunal was justified, on the facts and in the circumstances of the case, in holding that the firm was liable to be assessed in respect of the profits which arose and accrued to it with regard to its trading from January 1, 1972, to October 15, 1972, in terms of section 170 of the Income-tax Act, 1961? " The facts, as briefly stated, in the order of the Appellate Tribunal are that the assessee-firm comprised three partners during the accounting period which was the calendar year 1972. A new deed of partnership was constituted with effect from August 3, 1972, whereby four new partners were admitted into the partnership and thus the number of the partners swelled to 7 from 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity that there was succession within the meaning of section 170 of the Income-tax Act, 1961 (briefly, the Act). The Tribunal, however, held that income up to October 16, 1972, only was assessable in the hands of the firm. It is in the backdrop of this factual position that the aforementioned question has to be considered. The short question for consideration is whether the business of the firm was succeeded by the company and whether there was succession within the meaning of section 170 of the Act. The authorities clearly held that the business of the firm was distinct from the business of the company. The Appellate Tribunal relied on the case of CIT v. A. W. Figgies and Co. [1953] 24 ITR 405 (SC). In this case also, the assessee, a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the Appellate Tribunal rightly held that the firm was assessable till it was succeeded by the company. It is argued before us by counsel for the assessee that the profits of the business carried on by the firm do not accrue day-to-day and that in the instant case the account books were not closed when the company took over the assets and liabilities of the firm and, therefore, the profits of the firm could not be assessed in the hands of the company (?). We do not agree with the submission of counsel for the assessee. When the books of account are regularly maintained by the firm, profits can be ascertained without any difficulty till the date of succession. For ascertaining the profit, it is not necessary that the books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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