1988 (11) TMI 146

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.... of partnership firm, distribution of assets cannot be termed as sale or otherwise transfer within the meaning of s. 32A(5). The learned Authorities below have further erred in invoking the provisions of s. 32A(5)(c), which does not apply in the case of transfer and allotment of liabilities and investment upon dissolution of the firm. (3) The learned authorities below have also erred in not accepting the assessee's contention that in view of judgment of Hon'ble Supreme Court in the case of Malabar Fisheries vs. CIT reported in (1979) 12 CTR (SC) 415 : (1979) 120 ITR 49 (SC) the investment allowance already granted to the assessee-firm cannot be validly withdrawn under the facts and circumstances of the assessee's case. (4) The learned....

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....owance @ 25 per cent was claimed. As required under law the assessee had created a reserve for Rs. 39,000 for the purpose of making out the above claim for investment allowance. The firm was dissolved latter on 22nd Oct., 1972 and the assets and liabilities were distributed between the 4 partners viz., vs. Jethalal D. Trivedi, Jitendra D. Trivedi, Jaswant D. Trivedi and Ravindra D. Trivedi. From the next day a new firm was constituted by Svs. Jitendra D. Trivedi, Kiran Trivedi and Vijai Trivedi as partners. It is also reported that the three other outgoing partners started their own business separately. The main point for consideration is that the Investment Allowance Reserve a/c showing a credit of Rs. 39,000 was also distributed betwee....