Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 10(2) (vii) Income Tax Act 1922-S. 3 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Indian Income-tax Act, 1922 (11 of 1922) |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Income Tax Act 1922-S. 3, 10(2) (vii)-Firm whether a separate taxable entity - Whether same as partners - Balancing charge - Whether depreciation allowed to a disrupted HUF to be taken into consideration in determining the balancing charge of a firm which takes over the HUF business as a going concern. A Hindu Undivided Family consisting of Thakur Dan Singh and his son Thakur Mohan Singh was carrying on business as forest contractors. There was a total disruption of the family in March, 1956. On that day, the written down value of three trucks owned by the Hindu Undivided Family was nil on account of depreciation allowance granted under the Income Tax Act, 1922. On the same day when the joint family was disrupted, Thakur Dan Singh and his son Thakur Mohan Singh constituted a partnership firm. The business of Hindu Undivided Family was taken over as a running concern by the firm. The firm sold the three trucks for Rs. 24,252/-. The Income Tax Officer held that the entire sale proceeds should be deemed to be profits of the firm by virtue of the second proviso to s. 10(2)(vii) of the Income Tax Act, 1922 and he included that amount in the total income of the appellant. The decision of the Income Tax Officer was confirmed by the Appellate Assistant Commissioner, the Income Tax Appellate Tribunal and the High Court. The High Court took the view that inasmuch as the partners of the appellants were the same individuals who were the members of the Hindu Undivided Family and as the business was taken over as a running concern by the appellants from the family, there was merely a change in the style and nature of the Hindu Undivided Family. According to the High Court, the original cost of the trucks to the appellant would be the same as it was to the Hindu Undivided Family. |
Judge | Honble Mr. Justice R.S. Pathak |
Neutral Citation | 1978 INSC 220 |
Petitioner | D.s. Bist & Sons, Nainital |
Respondent | Commissioner Of Income Tax, Delhi Central, New Delhi |
SCR | [1979] 2 S.C.R. 224 |
Judgement Date | 1978-11-03 |
Case Number | 1727 |
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