TMI Blog1992 (3) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... 982 the assessee firm came to an end and one of its partners M/s. Himalaya Machinery (P.) Ltd. took over the running business along with all the assets and liabilities and started running business in its own name from 1-8-1982. At the first instance the assessee claimed depreciation proportionately for seven months i.e., upto 30-7-1982. Later vide their letter dated 22-11-1985 the assessee claimed full depreciation. The assessee also brought the fact to the notice of the concerned officer that the claim of depreciation for 7 months proportionately was claimed by inadvertent mistake. 3. The claim of the assessee was disallowed by the Assessing Officer on the ground that M/s. Himalaya Machinery (P.) Ltd. (partner) who took over the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod ended 31-12-1982, by Himalaya Machinery (P.) Ltd." 4. Aggrieved by the above order the assessee went in appeal before the first appellate authority. In appeal the assessee contended that the assessee had not sold any of its assets during the year under consideration nor had any of his assets been destroyed, demolished or discarded and in view thereof provisions of section 34(2)(ii) of the Act are not applicable in the instant case of the assessee. Relying upon the following judgments of various High Courts :--- 1. CIT v. Mohanbhai Pamabhai [1973] 91 ITR 393 (Guj.). 2. Velo Industries v. Collector, Bhavnagar [1971] 80 ITR 291 (Guj.) (FB) 3. Addl. CIT v. Smt. Mahinderpal Bhasin [1979] 117 ITR 26 (All.) 4. CIT v. Madan Lal B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of claim for full depreciation on the same assets cannot be denied to the assessee on the ground that depreciation would not be allowed twice in the same year on the same assets. 5. Brief facts before the Tribunal in the above case are as under--- " On the dissolution of a firm on 31-10-1975, the assessee, who was one of its partners, took over the firm's running business, and closed his first year of account on 31-3-1976 as sole proprietor. For the relevant assessment year, 1976-77, his claim for full depreciation on the business assets taken over, was disallowed by the ITO and the AAC on the ground that (i) the firm was nothing but a compendious name for its partners and hence, even on dissolution of firm, whatever assets th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (one of us was a party in that order) allotment of all the assets and liabilities to one of the partners upon dissolution of the firm could not be regarded as transfer of assets as contemplated in section 155 read with section 32A(1) of the IT Act. The words used in the section are " sold or otherwise transferred ". In other words the expression otherwise transferred has a wider meaning than the words " sold, discarded, demolished or destroyed " used in section 32(1)(iii). Furthermore the Supreme Court in the case of Malabar Fisheries Co. at page 60 of 120 ITR clearly held that every dissolution must in point of time be anterior to the actual distribution of the assets that takes place after making up accounts and discharging the debts and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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