TMI Blog1974 (4) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... r manufacture of alcoholic spirit and consequently this new business was being carried on by the aforesaid branch. The business lasted up to June 28, 1962, whereafter a new company, M/s. Kashmir Fruit and Chemical Industries Ltd., was floated as a public concern on June 29, 1962. This company carried on the manufacture of alcoholic spirit. An agreement to sell was executed between M/s. Devson Ltd. and the new company and the agreement to sell was later adopted by the purchasing company. In the new company M/s. Devson Ltd. became shareholder to the extent of 1,715 shares out of 2,165 shares. This company claimed rebate in accordance with the provisions of section 84 of the Income-tax Act, technically known as tax holiday, on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case. The Tribunal upheld the order of the Appellate Assistant Commissioner and dismissed the appeal filed by the revenue department. Thereafter, the Tribunal was approached by the department for making a reference to this court and, having agreed to do so, the following question of law has been referred to us in both these cases : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee-company was entitled to the exemption provided under section 84 of the Income-tax Act, 1961?" In our opinion, the answer to the reference lies within a narrow compass and on the facts found by the two Tribunals of fact a question of law hardly arises in this case. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reconstruction does not arise at all. It may be mentioned here that the Appellate Assistant Commissioner at page 54 of the paper book observed as follows : "It may also be observed that this was a case of succession of business. The successor was a different entity in law and had purchased outright the running business of the predecessor. The Supreme Court decision in Commissioner of Income-tax v. B. M. Kharwar is material on this point. The legal effect of the transaction has to be taken into consideration." This finding of fact has been affirmed by the Income-tax Appellate Tribunal in para. 7 of its order appearing at page 63 of the paper book, which is to the following effect : After a careful perusal of the records and the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere they observed that if the ownership of a business or an undertaking changes hands not ostensibly but in reality and effectively, that would not be reconstruction, On the other hand, reorganisation of the business on sounder lines or alterations in the mode or method of scope of the activities or control of the business would be no more than reconstruction of the business if it is substantially the same business carried on by substantially the same persons. It is contended that in the instant case also the new company which came into existence was owned substantially by M/s. Devson Ltd. who had purchased the large majority of the shares. Their Lordships in that case, however, prefaced their observations by the fact that where there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the Income-tax Appellate Tribunal, we refrain from making any observation on this aspect of the matter. Lastly, we might mention that this was not at all a case in which the Tribunal ought to have made a reference to this court. It is well settled that a reference to this court has to be made only if a clear question of law arises in the case. In the instant case, no question of law arose on the findings of fact arrived at by the two Tribunals. In other words, the order of the Tribunal was clearly concluded by findings of fact. In a recent case reported in Tax Gazette, Volume 1, 1973 (Additional Commissioner of Income-tax v. Sadiq Ali Bros.) a Division Bench of this court relying on a decision of the Supreme Court observed that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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