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TMI Blog2018 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... determined by the DVO was not sustainable in law. The finding so recorded has not been controverted by learned DR by bringing any positive material on record. Accordingly, we do not find any justifiable reason for interfering in the order of CIT(A) for deleting the addition so made. With regard to reopening of assessment, we found that there was a valuation report by the DVO suggesting higher value of the property. Under these facts and circumstances, the AO has correctly concluded that there is a reason to believe that there is an escapement of income. Accordingly, we do not find any infirmity in the order of CIT(A) for upholding the reopening of assessment. - IT A No. 3914/Mum/20 11, CO. No. 20/Mum/2012 - - - Dated:- 25-4-2018 - Shri R. C. Sharma, AM And Shri Ram Lal Negi, JM Revenue by Shri M.C. Omi Ningshen /Shri Rajesh Kumar Yadav Assessee by Shri Chetan Karia ORDER PER R.C.SHARMA ( A.M ) This is an appeal filed by the Revenue and Cross objection by assessee against the order of CIT(A)-29, Mumbai dated 24/02/2011 for A.Y.2004-05 in the matter of order passed 143(3) r.w.s.147 of the IT Act. 2. Rival contentions have been heard and record perused. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s judicial pronouncements in support of his claim. 6. The Assessing Officer proceeded to analyse the sequence leading to the issue under examination. The Assessing Officer stated that assessee was a partner in the firm M/s.Kakad Constrcution Co. alongwith Smt. Hardevi P Karia since 1984 with a profit ratio of 76% to 24%. The said firm was in possession of a property situated at Ghatkopar from which the firm was deriving rent. The existing partners vide agreement dated 15.6.2002 brought in two new partners. After this induction the share ratio in the firm was reallocated as under: Smt.Laxmiben Kakad 43% Smt.Hardevi P Karia 17% Shri Anand M Thakkar 20% Shri Mulraj P Thakkar 20% 7. Subsequently, vide agreement dated 4.9.2003 the first two partners Smt. Laxmiben Kakad and Smt. Hardevi P Karia retired from the partnership and the remaining partners continued as partners in the firm. The Assessing Officer stated that all these things happened within a period of 15 months. The Assessing Officer sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of Kakad Construction Co by the continuing partners. The partnership shall continue to carry on business at principal place of business that is at 4 Parul, New Maneklal Estate, Ghatkopar(W), Mumbai 400086. The partnership between continuing partners takes over all the assets including the property No.1052, survey No.78, not No.1, Ghatkopar. The business of the firm will be that of maintaining the assets of the firm and to conduct such other business as the partners mutually agree from time to time. The new partnership will be between Shri Anand Mulraj Thakkarand Shri Purushottam Mulraj Thakkar. 2) Clause 14(a) of the retirement deed mentions that the retiring partners have been paid ₹ 60 lakhs by the continuing partners, towards their capital, share of profit to the date of retirement and a right of the retiring partners in all the assets of the firm, mainly immovable property situated at Rajawadi Ghatkopar(East). There are several other clauses which will not be relevant for the issue under consideration. The deed has been signed by Shri Anand Mulraj Thakkar and Shri Purushottam Mulraj Thakkar. Hence as can be seen, the transaction under question is not a trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ental value to ₹ 20,23,646/-. It can be seen that the sale deed itself contains the names of numbers of tenants in various buildings. Building No.1 has 33 tenants, Building No.2 has 32, Building No.3 has 33, Building No.4 has 26, and Building No.5 has 25 tenants. The cost of providing alternative accommodation to the tenants has to be reasonably reduced from the gross value. That is why stamp duty authorities have taken the value of the property at ₹ 20,23,646/- only. . 8} It can also be pointed out that there is no provision to substitute the value of the consideration in the case of transfer of an immovable property being in the nature of a capital asset except for the provisions of section 50C. Even according to the provisions of section 50C, between the value( determined by the DVO and the stamp duty authorities, the value adopted by stamp duty authorities have to be chosen. In any case, in the case under consideration it is only transfer of an interest in partnership firm and not transfer of immovable property. 9) Now the only issue to be adjudicated is whether the claim of the appellant that the amount received on transfer of interest in partnership firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... movable property per se. It is only transfer of interest in the partnership firm. In such a case the value of interest in partnership firm which have been agreed upon by partners through a deed cannot be very re-determined or rewritten. There is no evidence that extra money has passed hands between the partners for the transfer of interest in the partnership firm. 12. We also observe that this property has been actually transferred by the continuing partners by an agreement for sale on 3rd August 2004 to M/s.Silver Land Developers Pvt Ltd., for a consideration of ₹ 40 lakhs. The details of payments made by the purchasing company are also available on the sale deed. The details of cheque numbers etc are also available on the last page. This is a third party evidence and cannot be disregarded. We also found that CIT(A) has dealt in great detail the reasons for such a difference between the value adopted by the DVO and value adopted by the Stamp Duty Authorities vis- -vis annual consideration sale at a later date vide para 7 of his order. The detailed finding given by the CIT(A) are as per material on record. We support the conclusion that the material gain determined by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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