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TMI Blog1986 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs and not Rs. 2 lakhs ? " The material facts, as set out in the statement of the case, are briefly as follows: The assessee is a registered firm consisting of eight partners and was constituted by a deed dated February 23, 1967. The assessment year in question was 1971-72 for which the accounting period ended on February 5, 1970. The partners of the assessee-firm had purchased a piece of land on September 9, 1965, for a sum of Rs. 1.25 lakhs. As the assessee-firm required a parcel of land to enable it to carry on its business, the partners of the assessee-firm agreed to transfer the aforesaid land to the assessee firm. A land account was opened in the books of the firm to which sum of Rs. 2 lakhs was debited and corresponding credit wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner, the Revenue preferred a second appeal before the Tribunal which held that the partners of the assessee-firm had valued the land at Rs. 2 lakhs as against the actual price of Rs. 1.25 lakhs paid by them; that they had thus inflated the cost of the land by Rs. 75,000 and that the transaction of sale of the land by the assessee to Rajdoot Hotel Enterprise Corporation (Private) Ltd., Bhopal, had resulted in a gain of Rs. 75,000 to the assessee-firm. The Tribunal, however, did not decide the nature of the gain as the Appellate Assistant Commissioner had not dealt with that aspect of the matter. The Tribunal, therefore, set aside the finding of the Appellate Assistant Commissioner regarding deletion of Rs. 75,000 from the income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the view of the Tribunal that the purchase price of the land has to be determined at Rs. 1,25 lakhs. The decision in CIT v. Hind Construction Ltd. [1972] 83 ITR 211 (SC) relied on by the Tribunal is not attracted in the circumstances of this case. That decision lays down that a person by handing over his goods to a partnership of which he is a partner, as his share of the capital, cannot be considered as having sold the goods to the partnership firm. As held by the Supreme Court in Sunil Siddharthbhai v. CIT [1985] 156 ITR 509, when a partner brings his personal asset into the partnership firm as his contribution to the capital, there is a transfer of a capital asset. In the instant case, all the eight partners of the assessee brought th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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