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TMI Blog2012 (7) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and if more plausible views or inferences can be drawn, such matters are not matters which are required to be examined as a pure question of law within the scope of Section 260A - it is not possible to make any conclusions unless there is a positive finding that the firm did exist after 25.03.1987 or after 01.04.1987. This factual position is not definite or clear, deserving a conclusion in law. In such circumstance an inference on the legal position is not warranted - no scope for interference with the order of the tribunal under Section 260A of the Act is very less - ITA No.274 of 2004, ITA No.68 of 2010 - - - Dated:- 4-7-2012 - D V Shylendra Kumar and B Manohar, JJ. For Appellants: Sri A Shankar Sri M Lava, Advs. For Respondent: Sri M V Seshachala, Adv. JUDGEMENT ITA No.274/2004 This appeal by the revenue under section 260-A of the Income Tax Act, 1961 [for short the Act ] is against the order of the Tribunal dated 18.12.2003 in Appeal No.IT[SS]A.53/Bang/2003. 2. The Tribunal having reversed the orders passed by the assessing authority and affirming order of the first appellate authority holding that the respondent assessee was liable to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t matter of assessment under the Act, if such information relating to undisclosed income had been unearthed pursuant to a search of the premises of the assessee who is liable to pay tax or pursuant to search of the premises of any other person, but the material there leading to the revelation of undisclosed income of the assessee, which can be brought to tax as the income of the block period. 5. A few undisputed facts as can be inferred from the records are that partnership firm by name Gayathri Enterprises came to be formed by the joining together of as many as seven partners as on 19.5.1980. It appears while three minors were admitted to the benefit of the partnership firm and later the company by name M/s. ASK Brothers Private Limited was also admitted as a partner as on 1.3.1986 and thereby the number of partners swell to eleven. 6. It is the version of the assessee that the partnership came to be dissolved as on 25.3.1987; that it is confirmed by the subsequent agreement dated 25.5.1987 and the manner of distribution of the shares of the partners of the dissolved form which had been indicated in the agreement dated 25.5.1987 came to be realigned and so also the valuation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt - revenue is that the Tribunal has totally ignored the material which was available; that it has recorded findings contrary to the findings recorded by the authorities even without any basis or without any rationale; that the Tribunal failed to see or has ignored specific material which is virtually in the nature of admission made by the very partners of the firm to indicate that the firm, in fact, had not been dissolved as on 25.3.1987; that it has continued to exist even during the year 1988 and onwards and the Tribunal has also overlooked the documentary evidence in the form of certain entries in the revenue records showing the names of erstwhile owners and then firm even much later to the year 1987 and such material could not have been ignored by the Tribunal for reversing the order passed by the authorities below. 10. However, Sri. Seshachala, learned counsel appearing for the appellant assessee has also taken us through the provisions of section 45[4] of the Act, its legislative history, definition of transfer as it occurs in section 2[47] of the Act, history of clause [6] of sub-section [ii] to Section 47 of the Act coming on to the statute book on 1.4.1987 changes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 47[ii] of the Act as it stood at the relevant point of time, any distribution of the capital assets on the dissolution of a firm, body of individuals or other association of persons is not to be regarded as transfer and as this legal position held the field on the day of dissolution, all other questions do not arise for examination and therefore irrespective of the findings recorded by the Tribunal, if the subject transaction is not to be regarded as transfer and therefore there is no need for disturbing the order of the Tribunal. 15. By way of abundant caution, Mr. Shankar, learned counsel for the assessee has also urged that the provisions of Chapter-XIV-B of the Act will be attracted only in respect of the undisclosed income of the assessee relating to the block period has come to the knowledge of the assessing authority and such information is attributable to material unearthed during a search pursuant to an authorization under section 132 of the Act. 16. It is also asserted that even on a combined reading of the instruments reflecting the three events, the transfer has taken place much prior to 1.6.1992; that the instrument dated 1.6.1992 is only an inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the firm was dissolved with effect from 25-3-1987 was not warranted in the facts and circumstances of the case and particularly in the wake of the entries in the books of accounts of M/s Ramaleela Enterprises indicates the existence of the firm and the statement of the partner etc., we are of the opinion that in matters where a plausible view can be taken and more so in a matter where a finding is based on a reading of the contents of a couple of documents and its inference, which becomes a finding and if more plausible views or inferences can be drawn, such matters are not matters which are required to be examined as a pure question of law within the scope of Section 260A of the Act. 23. We find in the facts and circumstances of the case, the material on record was definitely not of clinching nature and that the only conclusion could be that the firm was not dissolved on 25-3-1987, but only later. It may be or may not be! 24. The entire proceedings being on the premise that the firm continued to exist even during 1988 and because of which position, the provisions of the Finance Act, 1987 are to be made applicable and therefore the further consequences, we are of the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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