In Brief
A partnership firm that had entered into an agreement with the Rajasthan Government to construct and operate a toll road was converted into a private company before the commencement of the relevant assessment year. The company claimed deduction under Section 80-IA of the Income Tax Act. The Revenue denied the deduction, contending the company was not an original party to the agreement. The Supreme Court held that by statutory conversion under Part IX of the Companies Act, the company became the lawful successor to the firm's rights and obligations. Since the agreement language included successors and assignees, and the Government recognized the conversion, the company satisfied Section 80-IA requirements and was entitled to the deduction. The appeal was dismissed.
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