A.L.A. FIRM versus COMMISSIONER OF INCOME TAX, MADRAS
Surplus arising on revaluation of stock-in-trade at dissolution must be treated as revenue profit and charged to tax; reassessment under section 147(b) was validly initiated based on subsequent information of relevant judicial decision not considered at original assessment.
- Parties
- Appellant Assessee: A.L.A. Firm; Respondent Revenue: Commissioner of Income Tax, Madras
- Jurisdiction
- India
- Judgment Date
- 21 February 1991
- Procedural Posture
- Civil Appeal / Supreme Court, Appeal by Certificate From Madras High Court Judgment Dated 9.2.1976
- Outcome
- Appeal dismissed; decision of the High Court affirmed.
- Legal Topics
- Reassessment, Valuation of Closing Stock, Dissolution of Partnership, Section 147(b), Capital Gains Vs. Revenue Profits
Case Brief
Summary, issues, holding and outcome
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Parties
A.L.A. Firm
Appellant Assessee
Commissioner of Income Tax, Madras
Respondent Revenue
Procedural Posture
Civil Appeal / Supreme Court, Appeal by Certificate From Madras High Court Judgment Dated 9.2.1976
Legal Issues
- 1 Validity of reassessment under section 147(b) of the Income Tax Act
- 2 Taxability of surplus on revaluation of assets at dissolution
- 3 Applicability of Board's circular
Ratio Decidendi
Surplus arising on revaluation of stock-in-trade at dissolution must be treated as revenue profit and charged to tax; reassessment under section 147(b) was validly initiated based on subsequent information of relevant judicial decision not considered at original assessment.
Court Disposition
Appeal dismissed; decision of the High Court affirmed.
Orders
- No order as to costs.
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