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TMI Blog2015 (12) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Appellant on retirement from partnership firm M/s. D.S. Corporation is taxable under the head Capital Gains on the mistaken belief that retirement from partnership amounts to transfer within the meaning of section 2(47) of the I.T. Act. 2. The CIT(A) failed to appreciate the facts of the case and the relevant law on the subject. 3. The CIT(A) erred in not following the judgement of the Supreme Court and of the Jurisdictional Court. 4. The CIT(A) erred in construing the deed of retirement, under which no transfer had taken place, and without transfer there can be no Capital gains tax liability. 2. Assessee is an individual and she joined on 16.09.2005 a partnership firm M/s. D.S. Corporation as a partner having 20% profit sharing ratio therein. She retired from the said partnership firm M/s. D.S. Corporation on 27.03.2006. At the time of retirement she received a sum of ₹ 30,87,98,088/- from the said firm M/s. D.S. Corporation. However, as observed by the learned Assessing Officer, the assessee did not disclose the aforesaid receipt of ₹ 30,87,98,088/- as her income in the relevant assessment year 2006-07. Search Seizure action u/s. 132 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shetty's and were duly credited in their bank accounts. X. No tax was paid on these revalued profits on the plea that these were amounts exempt as per provisions of Section 10(2A) of the I.T. Act, 1961. 3. The matter was carried before the first appellate authority wherein various contentions were raised on behalf of the assessee and having considered the same CIT(A) confirmed the order of Assessing Officer. Same has been opposed before us, inter alia, submitting that CIT(A) should have allowed the appeal of assessee. For the same assessee raised various legal and factual submissions and requested to allow the claim of assessee prayed. On the other hand the learned D.R. supported the order of Assessing Officer and submitted that the order of ITAT in the case of Shri Sudhakar Shetty should be followed because it is based on the similar facts. 4. After going through rival submissions and material on record we find that the Tribunal in the case of husband Shri Sudhakar Shetty has decided the issue against the assessee by observing as under: - 2.5 In the light of the above, more specifically, when the issue has been settled by the Hon'ble jurisdictional High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial precedent. The precedent may not be binding when the judgement is per incurium i.e. in ignorance of the law or contrary to the law or its own earlier decisions of own or by inadvertence. Sometimes, there are conflicting judgements of the same court and the question arises whether latter judgement or earlier judgement becomes a binding precedent. In such a situation, if the two decisions are delivered by a Bench of equal strength, latter judgement may be followed specially when the earlier judgement is referred while deciding the matter in latter judgement. The same has happened in assessee s case. After the judgement in the case of Shri Sudhakar Shetty decided on 9th September, 2010 by E Bench, the similar matter was decided by the E Bench in the case of R.F. Nangrani, HUF vs. DCIT in ITA No. 6124/Mum/2012 on 10th December, 2014 wherein the decision in the case of Shri Sudhakar Shetty was also referred. In the said case the issue before the Tribunal was whether the amount of ₹ 14,15,61,370/- received from partnership firm Landmark Developments on retirement is a capital gain chargeable to tax? This issue was very similar to the issue in the case before us. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of this Court, something has been done in disobedience, it will be the duty of this Court as a policy to set the wrong right and not to allow the perpetuation of the wrong doing. In our opinion, the inherent power will not be available under section 151, CPC as available to us in such a case but it is bound to be exercised in that manner in the interest of justice and public interest. From the above decision of the Hon'ble Supreme Court the following proposition emerges: - (a) It is immaterial that in a previous litigation the particular petitioner before the Court was or was not a party, but if law on a particular point has been laid down by the High Court, it must be followed by all authorities and Tribunals in the State. (b) The law laid down by the High Court must be followed by all authorities and Tribunals when it has been declared by the highest court in the State and they cannot ignore it either in initiating proceedings or decision on the rights involved in such a proceeding. 8. In this regard, we find that the Hon'ble Bombay High Court in the case of Siemens India Ltd. Anr vs. K. Subramanian, Income tax Officer (1983) 34 CTR 23 observed in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by a partner on his retirement from partnership firm are exempt from capital gains tax relied upon the decision of this Court in the matter of Prashant S. Joshi V/s. Income Tax Officer Anr. reported in [2010] 324 ITR 154 (Bom). Counsel for the revenue is unable to point out as to how the decision in the matter of Prashant S. Joshi (supra) inter alia holding that no capital gains are payable by an erstwhile partner on amounts received on retirement would not be applicable to the present case. The only submission on behalf of the revenue is that there was an earlier decision of this Court in the matter of N.A. Mody V/s. CIT reported in [1986] 162 ITR 420 and it has not been considered in the decision rendered in the matter of Prashant S. Johsi (supra). 3. In the impugned order, the Tribunal does refer to the decision of this Court in the matter of N.A. Mody (supra) and states that it follows the decision of this Court in the matter of CIT V/s. Tribhuvandas G. Patel reported in 115 ITR 95 and the same has been reversed by the Apex Court in Tribhuvandas G. Patel V/s. CIT reported in 263 ITR 515. This Court in the matter of Prashant S. Joshi (supra) has also referred to the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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