TaxTMI 
TaxTMI 
1980 (9) TMI 13
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.... of sole selling agency of the Hukumchand Mills Ltd., Indore, which had been granted by the Hukumchand Mills Ltd. to the said firm for a period of five years. Under the terms of the agreement granting the sole selling agency to the firm, the firm had deposited a sum of Rs. 26 lakhs with the mills-company at the interest of 41% per annum. This amount was contributed by the partners of the firm. The mills-company, however, prematurely terminated the sole selling agency agreement on January 11, 1958, and as a consequence thereof the aforesaid partnership firm stood dissolved with effect from January 11, 1958, in accordance with the terms of the partnership agreement. The firm was assessed to income-tax in the status of a registered firm for th....
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....ioner and the remaining amount of Rs. 5,75,000 was payable to respondent No. 5. During the pendency of the litigation, respondent No. 4 had offered the income from interest OD deposits in their assessments to income-tax on the basis of accrual from year to year. The petitioner, on the other hand, appended a note to their returns filed in the relevant years, stating that the claims were in dispute and, as such, there was not even an accrued income. For the assessment year, 1973-74, relevant to the previous year in which the consent decree was passed as aforesaid, the petitioner filed its return on August 15, 1973, wherein it offered the entire income of its share. In the course of the assessment proceedings, enquiries were made by the ITO ....
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....ssessment year 1973-74. The ITO held that out of the total amount Rs. 17,25,000 received by the petitioner under the consent decree passed by the High Court, whatever amount was received by the petitioner over and above its capital contribution was in the nature of interest and as the said interest had become payable to the petitioner in the year of assessment by virtue of the consent decree, it was rightly offered to tax. The petitioner was, accordingly, assessed to tax. In the proceedings commenced against the dissolved firm under s. 148 of the Act, respondent No. 1, by his order dated March 26, 1976, held that the firm automatically stood dissolved the moment the selling agency agreement was terminated, as provided by the terms of the pa....
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....er. Name Share Amount (Rs.) 1) M/s. Swarupchand Hukumchand Pvt. Ltd. 8 annas 23,00,000 2) M/s. Chunnilal Onkarmal Pvt. Ltd. 6 annas 17,25,000 3) Shri Ratanlal Ramkumar Morarka 2 annas 5,75,000 &....
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....sment year 1973-74. It was urged that all the primary facts necessary to decide the said question were fully and truly disclosed by the petitioner to respondent No. 1, and since there was no new material or information coming to the knowledge of respondent No. 1, he had no jurisdiction to issue a notice under s. 148 of the Act. Learned counsel further contended that according to the return filed on behalf of respondents Nos. 1 to 3, it was clear that the notice was issued by respondent No. 1 as directed by the Commissioner by his letter dated March 4, 1978, and not on the basis of the satisfaction of the ITO. It was, therefore, urged that the impugned notice deserved to be quashed. Having heard learned counsel for the parties, we have come....
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....ailure on the part of the assessee to make a full and true disclosure. There is nothing before us to show that in the return filed by the petitioner, the particulars given were not correct or that the assessee had failed to disclose any fact material for its assessment. In the note of the ITO reciting reasons for issuing the impugned notice, the ITO has not disclosed any material on the basis of which he had arrived at the belief that, by reason of the omission or failure on the part of the petitioner to disclose fully and truly any particular fact necessary for the assessment of the petitioner, income had escaped assessment. In fact, the note does not even record the existence of the belief of the ITO. It seems that, as recorded in the not....