Section 25(4) relief follows where a genuine partnership succeeds an earlier assessed business and identity is proved.

Section 25(4) applied where the Tribunal found that the admitted partnership was genuine, the business had earlier been charged under the Income-tax Act, 1918, and the successor business was identical with the business carried on in 1926. On those binding factual findings, the statutory condition of succession to a previously assessed business was satisfied, and objections based on alleged lack of complete succession or change in identity were rejected. The assessee was therefore entitled to relief under Section 25(4), and the reference was answered in its favour with costs.

---

---

Issues: Whether the terms of Section 25(4) of the Indian Income-tax Act applied where the assessee, after carrying on the business as sole proprietor, admitted partners to the business and the Tribunal's findings established that the partnership was genuine, the business had earlier been charged under the old income-tax law, and the business taken over in 1940 was identical with the business carried on in 1926.

Analysis: The reference turned on the factual foundation required for the application of Section 25(4). Once the Tribunal found that the partnership deed of 30 October 1940 evidenced a real partnership, that the business in question had in fact been charged under the provisions of the Income-tax Act, 1918, and that the business sought to be assessed was identical with the business carried on by the deceased in 1926, the statutory condition of succession to the business assessed under the earlier law stood satisfied. The contention that there was no complete succession or that the identity of the business had changed was rejected on the facts found, which were treated as binding.

Conclusion: Section 25(4) applied to the assessment in question and the answer to the reference was in favour of the assessee.

Final Conclusion: The assessee was held entitled to relief under Section 25(4), and the reference was answered accordingly with costs awarded to the assessee.

Ratio Decidendi: Where the Tribunal finds a genuine partnership, prior assessment of the same business under the earlier income-tax law, and identity between the old and the successor business, Section 25(4) applies to the assessment.

---