9911796707
TMI Blog1992 (9) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the Appellate Tribunal was correct in law in holding that there was no transfer of interest by the assessee to the other partners in the firm within the meaning of section 2(47) of the Income-tax Act, 1961? " There was a partnership under the name and style of Messrs. White Field Industrial Corporation, Bangalore (for short, "White Field"). It purchased certain land in Seghalli, Bidarahalli, Hebli, Hoskote Taluk, Bangalore district, from Messrs. Krishna Mining Company, Goginenipuram, Gudur, Nellore district, under a registered sale deed dated May 15, 1972. Out of the four partners of the White Field, one Sri Peda Sekhar died on July 9, 1977. The remaining partners continued under a fresh deed of partnership execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other partners in the firm did not arise. It accordingly allowed the appeal following the judgment of this court in CIT v. L. Raghu Kumar [1983] 141 ITR 674. At the instance of the Commissioner of Income-tax, the above two questions are referred to this court for its opinion. Sri S. R. Ashok, learned standing counsel for the Department, submits that on retirement, the assessee received the benefit of conversion of property into industrial purpose and as the conversion is at a higher valuation, the benefit was passed on to the assessee on retirement, so there was a transfer within the meaning of section 2(47) of the Act. From the narration of the facts given above, it is clear that even before the assessee became the partner of White Fie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, no distinction could be drawn between an amount received by the partner on dissolution of the firm and that received on his retirement, since both of them stood on the same footing and the amount received by a partner from the partnership in excess of the capital and profits standing to his credit at the time of retirement could not be construed as "capital gain" under section 45 of the Act as there was no transfer within the meaning of section 2(47) of the Act, and such excess was not exigible to tax as capital gains. This judgment was followed by the Tribunal in arriving at the conclusion to which it reached. From the above judgment it follows a fortiori that when the amount standing to the capital amount of the retiri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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