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TMI Blog2014 (11) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... that the interest of a partner in a partnership is not interest in any specific item of the partnership property - It is a right to obtain his share of profits from time to time during the subsistence of the partnership and on dissolution of the partnership or on his retirement from the partnership to get the value of his share in the net partnership assets which remain after satisfying the debts and liabilities of the partnership. When a partner retires from a partnership and the amount of his share in the net partnership assets after deduction of liabilities and prior charges is determined on taking accounts on the footing of notional sale of the partnership assets and given to him, what he receives is his share in the partnership and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt from the firm is not liable to be assessee to capital gains tax? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount received by the assessee towards settlement of account and in consideration of settlement of civil suits represented his share in the partnership, which did not constitute transfer and therefore was not assessable to capital gains tax u/s. 45 of the Act although Sec. 47(ii) in this regard has been omitted w.e.f. 1.4.1988? 2. The facts of the case are that the appellant was partner in two firms, namely, Jyoti corporation and M/s. Jyoti Estate and he retired from both these firms on 24.6.1989. As per the terms of understanding the assessee had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Capital Gain because they were received in lieu of goodwill, which is a Long Term Capital Asset. As regards other receipts of ₹ 23,63,635/-, it was contended that the amount was received by the assessee as a result of various civil and criminal proceedings as such, the receipts were not in fact the income within the meaning assigned to it under the Income-tax Act. The CIT(A) rejected contention of the assessee. Although the CIT(A) agreed that the amounts were paid to the assessee on account of settlement of certain civil suits but he opined that since the nature of these disputes have not been specified before him, it was not possible to know the nature of amounts which had been received by the assessee. The CIT(A) directed the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has, while allowing the appeal of the assessee, considered the decision of this Court in the case of CIT VS. MOHANBHAI PAMABHAI reported in 91 ITR 393 and other decisions of this Court and the Hon ble Supreme Court. Paragraph No. 5 of the order of the Tribunal is reproduced as under: In the case of CIT VS. MOHANBHAI PAMA (91 ITR 393) the Hon ble Gujarat High Court held as under: The interest of a partner in a partnership is not interest in any specific item of the partnership property. It is a right to obtain his share of profits from time to time during the subsistence of the partnership and on dissolution of the partnership or on his retirement from the partnership to get the value of his share in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble Gujarat High Court in the case of CIT VS. MOHANBHAI PAMABHAI (91 ITR 393) has been affirmed by the Hon ble Supreme Court in the case of the same assessee reported at 165 ITR 166. Respectfully following the aforesaid decisions, we are of the considered view that the revenue authorities were not justified in bringing to tax ₹ 73,00,000/- being the amount received by the assessee from the firms of M/s. Jyoti Corporation and M/s. Jyoti Estate on his retirement from the said firms. 6. In view of the decision of this Court in the case of CIT VS. MOHANBHAI PAMABHAI (supra) which has been subsequently affirmed by the Hon ble Apex Court in the case of same assessee at 165 ITR 166, we are of the opinion that Tribunal has rightly allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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