Business succession under tax law requires continuity of the whole undertaking; a restarted venture is not succession.

Succession to a business under Section 26(2) of the Income-tax Act, 1922 requires the successor to take over and continue the predecessor's business as a whole with continuity in its carrying on. Where the business has been split up, discontinued, or later restarted as a new business, even with the same assets or premises, there is no succession within the section. On the facts stated, the Hindu joint family's money-lending business had already been discontinued before partition, and the later business was not a takeover of the whole undertaking; succession was therefore negatived.

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Issues: Whether the assessee had succeeded to the joint family business within Section 26(2) of the Income-tax Act, 1922.

Analysis: Succession to a business within Section 26(2) requires that the successor take over and continue the predecessor's business as a whole with continuity in its carrying on. Where the business is split up, or where the predecessor business has come to an end and a new business is later started, even with the same assets, premises, or conditions, there is no succession within the section. On the facts found, the money-lending business of the Hindu joint family had been discontinued before the partition, and the members who later carried on business did not take over the whole business of the joint family.

Conclusion: The assessee did not succeed to the joint family business within Section 26(2) of the Income-tax Act, 1922, and the answer was in the negative.

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