TaxTMI 
TaxTMI 
1961 (8) TMI 66
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....o the winding up and the distribution of the assets and liabilities between the coparceners, two partnerships were started and carried on brocade business similar to the one carried on by the family. It may be stated that the partners of the two firms were members of the Hindu undivided family. The partition and the setting up of the two partnership firms was treated by the excess profits tax authorities as being hit by the provisions of section 10A of the Excess Profits Tax Act and it was held that the partial partition in respect of the brocade business and the subsequent formation of the two partnerships and the carrying on of brocade business was for the avoidance and reduction of liability to excess profits tax. This view was upheld up to the reference stage in this court. The petitioner went up in appeal to the Supreme Court and the Supreme Court reversed the decision of this court on September 23, 1953. The findings of the Supreme Court were that there was in fact a partial partition, that the brocade business of the Hindu undivided family was wound up and the assets and liabilities distributed between the members constituting the Hindu undivided family, that subsequently ....
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....four chargeable accounting periods. That is as it should be, but the excess profits tax authorities have not allowed refund of the sum of ₹ 11,175-9-0 for the refund of which this writ petition has been filed. The last four items of excess profits tax became payable on the basis that the profits of the partnership businesses in brocade were the profits of the Hindu undivided family. It having been held that the brocade business after partial partition was no longer the business of the Hindu undivided family, the excess profits of that business could not be taken into consideration at all in computing the excess profits tax liability of the Hindu undivided family, and so the last four items of tax paid had in any case to be refunded. The reasons for the refusal of the refund of the fifth item of ₹ 11,175-9-0 given by the Excess Profits Tax Officer are two-fold: firstly, that the claim in regard to that amount was barred by limitation under section 50 of the Income-tax Act read with section 21 of the Excess Profits Tax Act, and secondly, that according to the findings of the Supreme Court, the brocade business of the Hindu undivided family had been wound up on July 16, 1....
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....sections of this chapter and argued that only three sections in this chapter relate to refunds strictly speaking, and the other sections deal with special cases providing for relief which may not necessarily amount to refund. Strictly speaking, section 48 appears to make provision for refund by the Income-tax Officer in assessment proceedings before him and further for refund by the Appellate Assistant Commissioner and by the Income-tax Appellate Tribunal in appeals before those authorities. The other two provisions, the one in section 49E makes provision for refund to which the assessee may be entitled by way of set-off against tax, interest or penalty remaining payable by the assessee, while the other in section 49E makes provision for refund upon death, incapacity, bankruptcy or liquidation of the person entitled to claim refund by his legal representative, trustee or receiver. There is force in this contention of Sri R.S. Pathak. Nothing has been urged to the contrary by the learned counsel for the income-tax department and I am of the view that the Excess Profits Tax Officer was not right in holding that the claim for refund of the sum of ₹ 11,175-9-0 was barred by limit....
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....gh Court in Govindarajulu Chettiar v. Commissioner of Excess Profits Tax [1958] 34 ITR 594 and Veerappa Chettiar v. Commissioner of Excess Profis Tax [1960] 39 ITR 29. Both these cases are clearly distinguishable for the reason that in both the cases there was a transfer of the business. By reason of that transfer the view taken was that there was a change in the ownership of the business. Change in the ownership being the crucial point in section 8, clearly in these two cases the provisions of section 8 applied. In the earlier of these cases, namely, Govindarajulu Chettiar v. Commissioner of Excess Profits Tax [1958] 34 ITR 594 the decision in Ramaswami Raja v. Commissioner of Excess Profits Tax [1954] 25 ITR 9 was considered and it was distinguished on the ground that there the question was not one of the transfer of business, but one of the businesses out of the several businesses had been dropped. If section 8 does not apply, then clearly relief under section 7(a ) of the Excess Profits Tax Act is admissible to the petitioner. The petitioner would be entitled to reduction of tax liability if the deficiency for all the chargeable accounting periods is larger than any excess pro....