TaxTMI 
TaxTMI 
1967 (7) TMI 20
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.... this partnership could be determined on completion of the works undertaken, whatever profit or loss remained after deducting the expenses incidental to the business of the partnership was to be distributed amongst the partners according to the shares set out in the partnership deed. The only work carried out by this firm of building-contractors was construction of certain residential bungalows at Surendranagar and the work was completed by Aso Vad 30 of Samvat year 2015 (October 31, 1959). The assessee contended before the Income-tax Officer that " previous year " for assessment year 1959-60 should be taken to be Samvat year 2014, and thus accounts for the period from June 19, 1958, to November 11, 1958, should be taken as the " previous y....
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....ed and the balances were carried forward. The Tribunal observed in its order that there was no significant break between the two periods, viz., Samvat year 2014 and Samvat year 2015. The Tribunal further found that even after ascertaining the profits for the whole period between June 19, 1958, and October 31, 1959, i.e., for the two Samvat years 2014 and 2015, no attempt was made by the assessee to ascertain the profits for the two years. The entire profit was credited to the partners in their respective shares in the account for Samvat year 2015 and in the returns for the assessment years 1959-60 and 1960-61, half the profit ascertained as at the end of Samvat year 2015 was shown in each year and this was done without any basis because the....
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....een the setting up of the business, profession or vocation and the next following 31st day of March inclusive, it shall be deemed that there is no previous year for the said assessment year and the previous year which would otherwise have been determined according to the option exercised by the assessee shall be deemed to be the previous year for the next succeeding assessment year." In the instant case, the business of this particular assessee firm started from June 19, 1958. Therefore, the previous year for the assessment year 1959-60 would ordinarily be from June 19, 1958, to 31st March, 1959, unless option to choose any other previous year was available to the assessee and such option was exercised by the assessee. Since there was no d....
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....tems of (an account) in order ; to add up and balance (an account). It is therefore clear that unless the firm has balanced its accounts in the sense of drawing up a balance-sheet and ascertaining the profits as of a particular date, the option under section 2(11)(c) cannot be availed of by the assessee and since the assessee in the instant case had merely carried forward the balances from Samvat year 2014 to Samvat year 2015, it cannot be said that as at the end of Samvat year 2014, the assessee had made up its accounts. Mr. Gandhi, on behalf of the assessee, relied on the decision in Sukhdeodas Jalan v. Commissioner of Income-tax. In that case the assessee was a contractor and he had taken a contract from the defence department on April ....