2014 (7) TMI 687

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....e legal position, it is clear that whatsoever may be the mode of dissolution or closure of the business of the firm, the profits have to be ascertained only by taking the closing stock at market value. The accounts have to be worked out on that basis upto the date of dissolution or prior to it. The situation that the firm came to an end by way of liquidation or partners dissolved the firm for distributing the assets of the firm, or dissolved and closed the firm with a view to form a company or otherwise, are, in our view, not relevant because the accounts of the outgoing entity, i.e., the firm, are to be prepared properly, may be the business remains the same and stock is also taken over by the new entity i.e., the company. For tax purposes....

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....n 260-A of the Income Tax Act contending that a substantial question of law arises namely that since the Tribunal had passed the order on merits after considering the pros and cons of the matter, it had no jurisdiction to rectify its mistake under section 254(2) of the Act and in as much as the said rectification amounts to a review of its decision, which is not permissible under section 254(2) of the Act. Having heard the learned counsel for the parties, we find that the Central Board of Direct Taxes has issued a Circular No. 68 [F. No. 245/17/71-A & PAC], dated 17.11.1971 explaining as to when a mistake apparent from the record could be corrected in the event of a subsequent decision delivered by the Supreme Court of India. For facilit....

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....nd that it has to be exercised to remove the error and achieve the finality. The Supreme Court held that an error apparent on the record means an error which strikes one on mere looking and does not need a long drawn out process of reasoning on points on which there may be conceivably two opinions. The Supreme Court, in the said case, found that the decision of the Appellate Tribunal was rendered without noticing the decision of the High Court. The Supreme Court held that there was an error apparent on the record, which could be rectified by a miscellaneous application being filed under section 254(2) of the Income Tax Act 1961. Similarly, in Shahbad Co-operative Sugar Mills Ltd. Vs. Deputy Commissioner of Income Tax [2011] 336 ITR 0222,....