Law: Income Tax Act, 1961

Section: 2(47),263,45

Income-tax--- ---Capital gains---Firm---Retirement of partner from firm---Amount standing to capital account of partner given to him---No capital gains arises---Indian Income Tax Act, 1961, Ss.2(47) & 45. When the amount standing to the capital amount of the retiring partner is drawn by him at the time of his retirement, it cannot be said that here was any transfer of a capital asset in favour of the existing partners by him for the purpose of section 45 of the Income Tax Act, 1961. The assessee was a partner of a firm. Land purchased by the firm was converted for industrial purpose and revalued at Rs.12 lakhs. The assessee retired from the firm in February, 1980, and received Rs.2 lakhs as his share in the firm. The assessee claimed that the sum of Rs.2 lakhs was not assessable as capital gains which was accepted by the Income-tax Officer. However, the Commissioner of Income-tax revised the order of assessment on the ground that the Assessing Officer did not go into the question whether any capital gains liable to tax had arisen in the case of the assessee on his receiving Rs.2 lakhs at the time of his retirement. The Tribunal set aside the order of the Commissioner of Income-tax. On a reference: Held, that the Tribunal was correct in holding that there was no transfer of interest by the assessee to the other partners in the, firm within the meaning of section 2(47). No capital gains arose. The Tribunal was justified in annulling the order of the Commissioner of Income-tax. CIT v. Raghu Kumar (L.) (1983) 141 ITR 674 (AP) fol. JUDGMENT SYED SHAH MUHAMMAD QUADRI, J -At the instance of the Commissioner of Income-tax, Andhra Pradesh, the following questions of law are referred to this Court for its opinion: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in law in annulling the Commissioner of Income-tax's order under section 263? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that there was no transfer of interest by the assessee to the other partners in the firm within the meaning of section 2(47) of the Income Tax Act, 1961?" There was…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492