TaxTMI 
TaxTMI 
2003 (11) TMI 44
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....ther, Balakrishna Pillai, the founder of the firm, that had been founded on November 9, 1976, and had comprised of himself, his three sons and his two daughters. After the demise of the father, the mother was included in his place and the remaining partners together with the mother constituted a new firm and continued to carryon the same business. The firm as it existed between 1976 and October 26, 1987, till the assessment year 1987 had claimed and had been allowed investment allowance to the tune of Rs. 5,80,454. It had made additions to the plant and machinery between 1981-82 and 1988-89, the value of such additions being Rs. 23,63,468. It had thus fully utilised the full extent of the investment allowance that had been allowed within t....
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....t is the law laid down by the Supreme Court in the case of Malabar Fisheries Co. v. CIT [1979] 120 ITR 49, a decision rendered by a three judge Bench. The court therein considered sections 2(47), 34(3)(b) and 155(5) of the Income-tax Act, 1961 and held that in order to attract section 34(3)(b), it is necessary that the sale or transfer of the assets must be made by the assessee to a person; that the dissolution of a firm must, in point of time be anterior to the actual distribution, division or allotment of the assets that takes place after making accounts and discharging debts and liabilities due by the firm, and that there is no transfer of assets by a dissolving firm to any person. The assessee's counsel places reliance on the decision ....
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.... the purchase of new machinery within the period allowed by law, by the old firm prior to its dissolution. Counsel for the Revenue, however, sought to contend that notwithstanding the three judge Bench decision in the case of Malabar Fisheries Co. [1979] 120 ITR 49 (SC) the words "otherwise transferred" in section 34(3)(b) are still attracted to the facts of this case and sought to place reliance on a two judge Bench decision in the case of CIT v. Narang Dairy Products [1996] 219 ITR 478 (SC). It was therein held that when an assessee who had received the benefit of development rebate gives exclusive user of the business to another, for the purpose of section 34(3)(b), there is a transfer. That decision does not in any way either water dow....