9911796707
TMI Blog1997 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... hangarajan, dated March 22, 1955, with effect from April 1, 1954. Certain properties situate at Thiruvathiyur High Road, Chennai, were purchased by the said two partners in their names and it was a common ground that the cost of the purchase was debited to the asset account of the book of the partnership firm and it was also shown as an asset in the balance-sheet. The assessee-firm also claimed depreciation on the properties for several assessment years. Similarly, other properties and assets were purchased subsequently in the names of the said two partners. During the accounting year relevant to the assessment year 1973-74, the original partners, namely, S. Rajamani and Thangarajan, took five more partners and executed a fresh partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs when the properties were purchased in the names of the said two partners. The second issue that was posed before the Appellate Tribunal was that the taking over of the properties of the firm by the two partners resulted in a transfer by the firm to the said two partners. On the first question, the Appellate Tribunal held that the properties and assets belonged to only the said two partners and by the taking over of the said properties, there was no transfer of the properties which originally belonged to the partners even prior to the alleged taking over. The Appellate Tribunal also held that even assuming that the firm was the owner of the properties, there was no valid or effective transfer in the absence of a registered deed for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in order to be valid and effective so as to attract the provisions of section 41(2) and liability to capital gains tax must be by means of an instrument in writing ?" Mr. C. V. Rajan, learned counsel for the Revenue, submitted that the views of the Appellate Tribunal on both the issues are not correct as the properties were purchased out of the funds of the firm and depreciation was claimed by the firm and further the properties were shown as assets of the firm in its balance-sheet. He, therefore, submitted that the view of the Appellate Tribunal that the original partners were the owners of the properties is not correct. He also submitted that the view of the Tribunal that there was no transfer is not justified in law. Though notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that mere book entry would not be sufficient for valid transfer of the interest of the partners in the immovable properties of the firm. The view of the Appellate Tribunal holding that in order to effect valid and effective transfer of immovable properties of the firm in favour of the partners, there must be a deed in writing and it must be registered especially where the properties involved are immovable properties is legally sustainable. In this view of the matter, we are not inclined to go into the further question whether the properties really belonged to the partners or not and if the second issue is decided by the Tribunal against the Revenue on this point, it will not be necessary to decide the first issue. The fourth question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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