COMMISSIONER OF INCOME TAX Vs. HYDERABAD STONE DEPOT
LAWS(APH)-1972-7-27
HIGH COURT OF ANDHRA PRADESH
Decided on July 14,1972

COMMISSIONER OF INCOME TAX Appellant
VERSUS
HYDERABAD STONE DEPOT Respondents

JUDGEMENT

GOPALRAO EKBOTE, C.J. - (1.) THIS case has come to us on reference made by a Bench of this Court on 28th July, 1971. The Bench noticed the conflict between Addepally Nageswara Rao & Bros. vs. CIT (1971) 79 ITR 306 (AP) and R.C. No. 50 of 1966 dated February 19, 1970 (CIT vs. Mandyala Govindu & Co. (1971) 82 ITR 926 (AP)) and R.C. Nos. 65 and 82 of 1968 dated February 10, 1971 (Khummaji Milapchand & Co. vs. CIT (1973) 91 ITR 333 (AP)). In order to resolve this conflict the matter has been referred.
(2.) BEFORE November 1, 1957, the Hyderabad Stone Depot consisted of 16 Partners. From November 1, 1957, however, under a deed of partnership executed on November 5,1957, a new partnership consisting of 18 partners was constituted. One of the partners, viz., Subash Keswarkar, being a minor, was admitted to the benefits of partnership.
(3.) FOR the asst. year 1959 -60, the firm filed an application under S. 26A of the IT Act before the ITO. Without making any order on the said application, the ITO made an assessment order treating the firm as an unregistered one. The assessment order was made on October 29, 1959. Subsequently, on an application made by the assessee under S. 27 of the Act, the ITO re -opened the assessment and made a fresh assessment on March 31, 1960, treating the firm as a registered one. The firm was thus assessed to a tax of Rs. 5,946.46. The ITO then allocated the profits among the 15 partners. The ITO disallowed the alleged loss of Rs. 26,369 and made certain adjustments. The assessee carried the matter in appeal. The AAC set aside the assessment order and remitted the case to the ITO directing him to dispose of the application filed under S. 26A of the Act before making any allocations under S. 23B of the Act. The AAC also felt that the relevant factors necessary to make the assessment were not examined by the ITO.;


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