attempts made by the income tax department to recover the tax from baba gowd having proved unsuccessful on march 13 1954 the income tax officer issued a numberice of demand addressed to rajareddy mallaram anumberher member of the group.
the income tax appellate tribunal hyderabad bench modified the order of the appellate assistant companymissioner.
the income tax officer nizamabad circle issued a numberice under section 34 of the income tax act calling upon baba gowd one of the members of the group to file a return of the income of the group but baba gowd failed to file the return on the due date.
the latter then applied under section 27 of the indian income tax act for cancellation of the assessment.
8826 14 0 as the tax payable.
in appeal to the appellate assistant companymissioner the order was set aside and the income tax officer was directed to cancel the order of assessment under section 23 4 and make a fresh assessment after giving an opportunity to rajareddy mallaram to file a return and to produce the books of account of the dissolved group.
shah j. baba gowd p. v. rajareddy and rajareddy mallaram formed an association of persons called nizamabad group liquor shops called for the sake of brevity the group.
the business was then discontinued and the group was dissolved.
the application was rejected by the income tax officer.
the income tax officer then assessed the taxable income of the group under section 23 4 at rs.
51000 and determined rs.
for the fasli year 1358 i.e. october 1 1948 to september 30 1949 the group carried on business in liquor companytracts obtained from the former state of hyderabad.
with the end of fasli year 1358 the companytracts came to an end.
the group did number make a return of its income pursuant to the general numberice under section 22 1 of the indian income tax act.
