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TMI Blog2004 (9) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 60 or section 63 of the Income-tax Act, which defines the word "transfer". – Question is answered in the affirmative, against the Revenue - - - - - Dated:- 7-9-2004 - Judge(s) : P. D. DINAKARAN., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by K. RAVIRAJA PANDIAN J. - Pursuant to the orders of this court dated August 24, 1998, the Income-tax Appellate Tribunal, "B" Bench, Madras, has made a statement of case to this court by raising the following question of law for our answer: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law and had valid materials in holding that the assessee had transferred only the lodging business to the trust and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not hit by the provisions of section 60 of the Income-tax Act and in that view of the matter, the Appellate Tribunal deleted the income earned from the property at the hands of the assessee. In the above said factual matrix, at the instance of this court, the Tribunal framed the question of law and referred the matter. Learned counsel for the Revenue submitted that what was transferred in favour of the educational charitable trust was only the income from the property, and the income earning property, viz., source of income, has not been transferred, and as such, it is hit by section 60 of the Income-tax Act. The reasoning of the Appellate Tribunal for reversing the orders of the authorities below is not correct. He also relied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by learned counsel for the Revenue, is one rendered in the case of CIT v. Sunil J. Kinariwala [2003] 259 ITR 10. That was a case in which the Supreme Court reversed the decision of the High Court holding that there was a clear distinction between a case where a partner of a firm assigns his share in favour of a third person and a case where a partner constitutes a sub-partnership with his share in the main partnership. Whereas, in the former case, in view of section 29(1) of the Indian Partnership Act, 1932, the assignee gets no right or interest in the main partnership, except of course, to receive that part of the profits of the firm referable to the assignment and to the assets in the event of dissolution of the firm, in the latter c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case referred to, there existed an agreement to transfer and because of the existence of that agreement to transfer, the Supreme Court held that the applicability of section 60 of the Income-tax Act is ruled out and totally excluded. The principle laid down in Dalmia Cement Ltd. v. CIT [1999] 237 ITR 617 (SC), is squarely applicable to the facts and circumstances of this case, as in the case on hand also, apart from the factum of transfer of income to the educational and charitable trust, there exists an agreement in respect of the relevant assessment years in favour of the trust to manage the property in question and receive the rent from that property and utilise the same for the purpose of the educational and charitable instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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