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Issues involved:
1. Determination of capital gains on machinery received by a partner from a firm on retirement. 2. Admissibility of assessee's contention on capital gains without filing an appeal. Issue 1: Determination of capital gains on machinery received by a partner from a firm on retirement The High Court considered whether the Appellate Tribunal was correct in holding that the assessee, as a partner in a firm, was a part owner of the machinery and should be treated as having held the property from her membership in the firm. The Tribunal concluded that the capital gains arising from the machinery received by the assessee on retirement and subsequently sold should be treated as long-term capital gains. The Court referred to a previous case where it was established that partners in a firm are considered owners of the property held by the firm, and if the property is transferred to a partner after a certain period, it cannot be regarded as a short-term capital asset. The Court upheld the Tribunal's decision, stating that the capital gain in this case was indeed a long-term capital gain due to the firm holding the assets for over sixty months. Issue 2: Admissibility of assessee's contention on capital gains without filing an appeal The second issue revolved around whether the Tribunal was correct in admitting the assessee's contention on capital gains as long-term without the assessee filing an appeal against the Appellate Assistant Commissioner's order. The Court ruled in favor of the assessee, stating that the Tribunal was justified in granting relief to the assessee even without a specific appeal or cross-appeal. The Court emphasized that the Tribunal had the authority to consider the claim made by the assessee before the Income-tax Officer, especially when the necessary facts were available on record. The absence of an appeal by the assessee against the Commissioner's order did not prevent the Tribunal from determining that the capital gain was a long-term capital gain. The Court held that the ends of justice supported the Tribunal's decision to grant relief to the assessee in such circumstances.
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