1978 (6) TMI 94

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....ern to the above firm. The net value of the assets amounting to Rs. 11,76,185 as per the balance sheet was credited to the capital account of the assessee. The CIT initiated action under s. 263 on the ground that the ITO did not either consider or considered properly the effect of the provisions of ss. 41 (2) and 45 on the transfer of assets or the undertaking by the assessee to the above firm. In response to the notice issued the assessee's representative appeared before the CIT and filed a written representation. It was pointed out that as per the ruling of the Madras High Court in the case of D. Kanniah Pillai vs. CIT Madras(1), the transfer of assets by the assessee to the firm did not attract the provisions of ss. 41(2), since the tran....

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....he Tribunal in the case of Dr. M.G. Padbidri, Bombay vs. 17th ITO, D-1 Ward, Bombay(5), reported in (1976) Tax. 50(6)124. On behalf of the Revenue the learned Departmental Representative contended that the order of the CIT is quite in order. He submitted that the Commissioner has followed the formalities prescribed by law. He supported the order of the Commissioner by referring to the decision of the Gujarat High Court in the case of Additional CIT, Gujarat, Ahmedabad vs. M/s. Mukur Corporation, Ahmedabad.(6) 3. We have considered the rival submissions. We find considerable force in the submission made by the learned counsel for the assessee before us. It is true that the Commissioner can initiate action under s. 263 on the basis of his ....