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TMI Blog2004 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... be the cost for which the previous owner of the property acquired it. In the instant case the property was acquired by the partnership firm and hence cost of acquisition by firm is to be considered. The written down value as per balance-sheet is required to be taken into consideration which in the instant case has been taken into consideration. There is no provision for entitlement to set off the liability of the partnership in the computation of capital gain – Hence both questions are answered in favour of the Revenue - - - - - Dated:- 19-2-2004 - Judge(s) : B. C. PATEL., BADAR DURREZ AHMED. JUDGMENT The judgment of the court was delivered by B. C. PATEL C. J. -For the assessment years 1968-69,1969-70 and 1970-71, the Tribunal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed an ex parte decree declaring that the partnership shall stand dissolved with effect from July 22, 1966, the date of filing the suit, and that the partnership business assets, credits and effects including the goodwill of the firm M/s. Bombay Tool and Dye, plant and machinery and the amount receivable by the said partnership be and they are hereby transferred as a going concern to the assessee (the plaintiff) and the same do belong to the assessee (the plaintiff) and the assessee (the plaintiff) is hereby empowered to receive and get any outstanding debts and claims of the said partnership and the assessee (the plaintiff) do pay all debts and liabilities of the said partnership and the defendant (outgoing partner) do pay the assessee (p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been referred by the Tribunal. It may be noted that the questions, which were never raised earlier were tried to be raised but, the Tribunal has not given importance to the questions and did not allow the assessee to raise the question at the second appellate stage. It was suggested that the assessee was the money lender and the amount was given as advance. It also transpires that the assessee contended that in view of the decree drawn by the Bombay High Court, in satisfaction of the loan of Rs. 5 lakhs, inclusive of interest, the same should be treated as the stock-in-trade of the assessee. We have to examine the nature of the decree drawn by the court at the instance of the assessee. The nature of the decree has much bearing on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an action to recover a debt, it remains a suit for a declaration to dissolve the partnership and winding up of its affairs". In the absence of a finding of fact by the Tribunal that the plaint disclosed that the suit was also filed to recover the debt, the Tribunal was justified in arriving at the conclusion. At this stage, it would be relevant to refer to section 48 of the Partnership Act which refers to the mode of settlement of accounts between the partners. Section 48 reads as under: "48. Mode of settlement of accounts between partners. -In settling the accounts of a firm after dissolution, the following rules shall, subject to agreement by the partners, be observed: (a) Losses, including deficiencies of capital, shall be paid fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, section 48 of the Income-tax Act, 1961 refers to computation and deduction. At the relevant time, the said section read as under: "48. Mode of computation and deductions. -The income chargeable under the head 'Capital gains' shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely: - (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the capital asset and the cost of any improvement thereto." Only expenditure incurred in connection with the said transfer of the capital assets or cost of acquisition of the capital or cost of any improvement thereto can b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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