1993 (1) TMI 271

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....ept the claim being granted benefit of section 5CC and levied the tax on the purchases of raw material amounting to Rs. 18,160 at 1 per cent being the difference between section 5CC and 5C and also imposed the penalty under section 16(1)(e). The said levy of tax and imposition of penalty were disputed by the assessee-Munna Lal in appeal filed before the Deputy Commissioner (Appeals II), Commercial Taxes, Jaipur. The appeal was allowed on the finding that the unit being the same as it was when the exemption under section 5CC was granted, Munna Lal was entitled to get the same. As a result whereof, the levy of tax and imposition of penalty were quashed. The department went in revision before the single Member of the Board of Revenue. The r....

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....the petitioner could continue to be treated as new unit for the purpose of section 5CC. The explanation added was as under: "For the purpose of this notification, 'new unit' means factory or workshop using machinery or substantial parts thereof not already used or acquired for use in any other factory or workshop in Rajasthan (under the same or changed ownership), but does not include any factory or workshop established on the site of an existing factory or workshop manufacturing the same goods or any addition to or extension of an existing factory or workshop for manufacturing the same goods." From the explanation, it is clear that in a case of changed ownership, the unit would continue to be treated as it was before. In the instant ....

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....pon dissolution after discharge of liabilities is nothing but a mutual adjustment of rights between partners and there is no question of any extinguishment of the firm's rights in the partnership assets amounting to a transfer of assets within the meaning of section 2(47) of the Income-tax Act, 1961. There is no transfer of assets involved even in the sense of any extinguishment of the firm's rights in the partnership assets when distribution takes place upon dissolution." Following the aforesaid decision of the Supreme Court, I hold that on the old partners going out of business, the dissolution of firm takes place, but entitlement of getting the benefit of section 5CC continues. This point arose before the Allahabad High Court in Co....