TMI Blog1997 (11) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... section 104 of the Income-tax Act, 1961, were not applicable to the assessee-company for the assessment year 1976-77 ? " The facts of the case relevant for deciding the controversy in this reference, briefly stated, are as follows : Orkay Knitting Industries Pvt. Ltd. amalgamated with the assessee-company with effect from July 1, 1975. The amalgamation was approved by this court by order dated October 16, 1975, subject to the terms of the said order and the scheme of amalgamation attached thereto. As a result, Orkay Knitting Industries Pvt. Ltd. merged with the assessee-company with effect from July 1, 1975. However, despite the amalgamation of Orkay Knitting Industries Pvt. Ltd. with the assessee-company with effect from July 1, 1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amendment made by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976. The case of the assessee was that the law as amended with effect from April 1, 1976, was not applicable to the assessment of the income of the company which was amalgamated with the assessee-company with effect from July 1, 1975. This submission of the assessee did not find favour with the Commissioner of Income-tax (Appeals) who was of the opinion that the liability of the amalgamating company for the previous year ending June 30, 1975, had to be determined on the basis of the law as it stood on the first day of the relevant assessment year, i.e., April 1, 1976. Admittedly, the amalgamating company was liable to additional tax as per the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s profits. Sub-section (4) of section 104 reads as under : " (4) Without prejudice to the provisions of section 108, nothing contained in this section shall apply to--- (a) an Indian company whose business consists wholly or mainly in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power; (b) an Indian company, the value of whose capital assets, being machinery or plant (other than office appliances or road transport vehicles), as shown in its books on the last date of the relevant previous year is fifty lakhs of rupees or more. Explanation.---For the purposes of clause (a) of this sub-section, the business of a company shall be deemed to consist mainly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the law to be applied is that in force in the assessment year unless otherwise stated or implied. Reference may be made in this connection to the decision of the Supreme Court in CIT v. Isthmian Steamship Lines [1951] 20 ITR 572 where it was observed : " It will be observed that we are here concerned with two datum lines : (1) the 1st of April, 1940, when the Act came into force, and (2) the 1st of April, 1939, which is the date mentioned in the amended proviso. The first question to be answered is whether these dates are to apply to the accounting year or the year of assessment. They must be held to apply to the assessment year, because in income-tax matters the law to be applied is the law in force in the assessment year unless othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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