By an agreement dated August 2, 1956, the Company agreed to purchase all the assets of the vendors, goodwill and the book debts and other liabilities and claims against the Company as on the date of transfer in companysideration of allotment of 260 fully paid up shares of the Company of the numberinal value of Rs.
The order was companyfirmed in appeal by the Appellate Assistant Commissioner and by the Income tax Appellate Tribunal.
2,60,000/ .
Appeal from the judgment and decree dated December 8, 1965 of the Patna High Court in Misc.
33,000 representing the difference between the value of the closing stock in the books of account of the vendors and the opening stock in the books of account of the Company.
It was provided by cl.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
C. Chagla and R. C. Prasad, for the appellant.
Jagadish Swarup, Solicitor General, G. C. Sharma, R. N. Sachthey and B. D. Sharma, for the respondent.
In a proceeding for assessment to tax for 1958 59, the Income tax Officer found that in the books of the vendors the value of stock as on August 1, 1956 was Rs 1,77,285 while in the books of the Company the opening stock taken over by the Company was valued on the same day at Rs.
4 of the agreement That all assets of the vendors in respect of all its business shall be taken over at the book value standing in the books of accounts of the vendors as on the 1st August One Thousand Nine Hundred Fifty six.
The India Machinery Stores P Ltd. is a private companypany incorporated with the object of taking over the business carried on by the India Machinery and Mills Stores hereinafter called the vendors.
Judicial Case No.
The Income tax Officer held that the valuation by the Company, of the opening stock was in clear violation of the terms of agreement between the vendors and the Company and added a sum of Rs.
38 of 1962.
376 of 1967.
2,10,285.
The Judgment of the Court was delivered by Shah, J. This appeal is filed with certificate granted by the High Court of Patna under s. 66A 2 of the Indian Income tax Act, 1922.
