2002 (7) TMI 51

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....) nor the provisions of sections 176(3A), 170(1)(b) and 28(iv) are attracted?" In this case, the assessee-company was one of the partners of Saurashtra Packaging Services and that firm stood dissolved with effect from April 1, 1983, and the business of the said firm was taken over as a going concern by the assessee-company with effect from April 1, 1983, itself in the accounting year relevant to the assessment year 1984-85. The assessee received sales tax refund of Rs. 33,303 in the assessment year 1984-85 and Rs. 12,887 as sales tax refund in the previous year relevant to the assessment year 1985-86. The Assessing Officer included these two amounts in the total income of the assessee rejecting the contention of the assessee that the amoun....

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....x refund received by the assessee-company in the assessment years 1984-85 and 1985 86 were not to be included in the total income of the assessee. In the aforesaid premises, the Revenue has come in reference before this court and sought the opinion of this court on the above question. Heard Mr. Tanvish U. Bhatt, learned standing counsel appearing for the applicant-Revenue. Nobody appears on behalf of the respondent-assessee though notice was duly served. Mr. Bhatt has submitted that the amounts of sales tax refund received by the assessee was to be included in the total income of the assessee in view of the provisions contained in section 41(1) of the Act and the said amount was also to be included considering the provisions contained in....

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....ed must be the same. If there is change in the identity of the assessee, there would be no tax liability under section 41. If the assessee to whom the trading liability may have been allowed as a business expenditure in the earlier year ceases to be in existence or if the assessee has changed on account of the death of the earlier assessee, the benefit received in the subsequent year cannot be treated as income received by the assessee." Since in the present case, the identity of the assessee is changed and the refund is received by the successor firm, the provisions contained in section 41(1) are not applicable and the amount of sales tax refund received by the assessee-firm cannot be taxed by invoking the provisions of section 41(1) of t....

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....he business was continued even after the same was taken over by the assessee-firm. In such a situation, the provisions of section 176(3A) of the Act cannot be pressed into service. The Revenue is, therefore, not justified in invoking the provisions of section 176(3A) of the Act for the purpose of including the amount of sales tax refund in the taxable income of the assessee-firm. As far as section 170(1)(b) read with the Explanation there to is concerned, it has no application to the facts of the present case. With a view to examine this point, it is necessary to reproduce the said section. Section 170(1)(b) reads as under: "(1) Where a person carrying on any business or profession (such person hereinafter in this section being referred t....