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TMI Blog2006 (6) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... . Johnson, the assessee. ITA 123/2000 is an appeal filed by the Commissioner of Income-tax, Cochin, under section 260A of the Act challenging Annexure D order of the Income-tax Appellate Tribunal passed in ITA 187/Coch./1994 in the matter of the assessment of the respondent, C.F. Raju. Both the proceedings relate to the assessment year 1989-90. The Tribunal had, inter alia, accepted the contention of the assessees that there was no evidence of the assessees having obtained a sum of ₹ 10,00,000 (Rupees ten lakhs) by way of pakidi from their tenant one Sundaresa Pai to whom the ground floor of a commercial building situated by the side of M.G. Road, Ernakulam was let out as per an unregistered lease deed executed on 10-2-1989. 2. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te receipt of any amount over and above the sum of ₹ 2 lakhs recited in the document of lease. In the absence of any circumstance to indicate receipt of any amount by way of pakidi by the assessees, it is not permissible to draw inferences founded on mere conjectures to conclude that the assessees had received a sum of ₹ 10 lakhs by way of pakidi. The solitary piece of material namely the sworn statement by Sundaresa Pai was not put to the assessees nor were they given an opportunity to cross-examine the said Sundaresa Pai. Hence, the Tribunal was right in dislodging the findings reached by the assessing authority and the appellate authority that the assessees had obtained a sum of ₹ 10 lakhs by way of pakidi and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation For the purposes of sub-clauses (v) and (vi) immovable property shall have the same meaning as in clause (d) of section 269UA; [Emphasis supplied] 6. Thus, any transaction by way of any agreement or arrangement which has the effect of transferring o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.M.B. Mohamed Abdul Khader [1987] 166 ITR 207 (Mad.) relied on by the assessees has no application to the facts of the present case. In the above decision, the proposition of law that was laid down was that in a case where there is no registered document of transfer by the assessee partner of his immovable property in favour of the firm in which he is a partner, there is no liability to capital gains. This legal position is well-settled. When a partner makes over his personal asset to the firm in which he is a partner, there is no transfer involved. Similarly distribution of surplus properties of the dissolved firm among the partners after settlement of accounts also does not involve any transfer and does not require registration. (Vide A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sworn statement of Sundaresa Pai and that even the search conducted in the premises of one of the assessees on the very same day on which the premises of Sundaresa Pai, the tenant were searched, did not yield any material to indicate receipt of ₹ 10 lakhs allegedly paid to the assessees. It is true that the assessees did not have the opportunity of challenging the sworn statement given by the tenant. But the fact that about 1,350 square feet of commercial premises with all amenities on the ground floor of a three storeyed building bearing Cochin Corporation Door No. 38/2154 situated in a prime location near the Jayalakshmi Textile Shop and by the side of M.G. Road, Ernakulam, were let out by the assessees to Sundaresa Pai on 10-2-198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase where the order is vitiated for non-compliance of the principles of natural justice, the proceedings do not come to an end. Upon the quashing of the order the matter will stand restored to the stage prior to the one at which the order impugned was passed. (See CIT v. M. Sreedharan [1991] 190 ITR 604). We are, therefore, inclined to give the revenue an opportunity to pursue its case by following a fair procedure. It is well-settled that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision, the appeal is preferred, to dispose of the whole or any part of the matter afresh, unless forbid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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