9911796707
TMI Blog1971 (1) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded goodwill, machinery, furniture, medicines, library and copyright in respect of certain publications were valued at the date of dissolution at Rs. 2,50,000. The respondent was paid a sum of Rs. 1,25,000 in lieu of his share and the business together with the goodwill was taken over by Devi Sharan Garg. In proceedings for assessment of the respondent for the year 1947-48, the Income-tax Officer sought to bring an amount of Rs. 70,000 to tax as capital gains. The contention raised by the respondent that no part of the amount of Rs. 1,25,000 received by the respondent represented capital gains was rejected by the Income-tax Officer, Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. The Tribunal, however, reduced t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dwill, machinery, furniture, medicines, library and the copyright in respect of certain publications. A large majority of the assets were incapable of physical division, and the partners agreed that the assets be taken over by Devi Sharan Garg at a valuation, and the respondent be paid his share of the value in money. Such an arrangement, in our judgment, amounted to a distribution of the assets of the firm on dissolution. There is no clause in the partnership agreement providing for the method of dissolution of the firm or for winding up of its affairs. In the course of dissolution the assets of a firm may be valued and the assets divided between the partners according to their respective shares by allotting the individual assets or paying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital assets for the purpose of section 12B was that as long as there was distribution of capital assets in specie and no sale, there was no transfer for the purposes of that section, but if there was a sale of the capital assets and profits or gains arose therefrom, the liability to tax arose, whether the sale was by the administrator or executor or a legatee, and that the expression " distribution of capital assets " in the third proviso to section 12B(1) meant distribution in specie and not distribution of sale proceeds. That case has no application. There was no distribution of capital assets between the legatees : the assessee had pursuant to the authority reserved to him from the executor of the deceased person sold the shares an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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