Commissioner of Income Tax vs Jain Bros.

The petitioner seeks a direction asking us to direct the Tribunal to state the case and refer the following two questions to us:

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that there was no transfer of assets on the dissolution of the old firm and that the provisions of section 34(3)(b) of the income tax Act were not applicable?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that action u/s 155 of the Act was invalid and so the investment allowance could not have been withdrawn?

The firm of Jain Bros., Jalgaon, originally consisted of five partners. From 1-1-1985, three partners retired from the firm. The remaining two partners constituted a new partnership. Two of the retiring partners took a third partner and formed a new partnership. Each of these firms and the remaining sole retiring partner took over some of the businesses of the old partnership. The present assessees are the new firm in which two of the partners of the old firm continue to be partners of the new firm.

In these circumstances, the ratio laid down by the Supreme Court in the case of Malabar Fisheries Co. Vs. Commissioner of Income Tax, Kerala, covers the points in dispute in the present case and, hence, no useful purpose will be served by directing the Tribunal to refer the above two questions to us. Rule discharged.