9911796707
TMI Blog1984 (8) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... business by taking over all the assts and liabilities hitherto carried on by the assessee aas per terms and conditions agreed to orally. In the new firm the assessee had 40 per cent share. After the ITO s completion of the assessment of the assessee for the assessment year 1981-82, the CIT initiated revisionary proceedings under section 163 of the Act on the ground that the assessee when she ceased to be the proprietrix of the concern had valued the stock-in-trade of the business at Rs. 4,31,108 on the basis of cost or market value whichever is lower (on the basis of cost price adopted). According to the Commissioner this option of valuation was available only during the subsistence of the business and not at the point of termination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear being lower. The newly constituted firm had taken over the assets and liabilities of the proprietor s business as a going concern at market value as on 1-4-1981 and the business was subsisting as on 31-3-1981. it was further submitted that the cited High Court decisions are distinguishable. The departmental representative in reply relies on the Commissioner s order. 3. We have heard the parties and were are of the view that the Commissioner s order cannot be sustained. In the present case of the assessee has valued the closing stock of the proprietary business as on 31-3-1981 at cost price based on the regularly employed basis of valuation of cost price or market price, whichever is lower. The conversion of proprietary business into p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 520(Mad) to the effect that when a person converts his sole proprietary concern into a partnership of which he is a partner, there is no sale within the meaning of the Sale of Gooks Act and what the person chose is merely to throw his private property by making it a partnership asset on such terms as may by mutually agreed to between the parties. In the present case, where the propriety business has been converted into partnership as a going concern, we have to hold that there is no termination or discontinuance of the business and the decisions relied on by the department would have no application thereto being based on totally different facts and contentions. Further int eh present case, the partners including the assessee and the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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