9911796707
TMI Blog1983 (8) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... shown in the balance-sheet of the firm as on March 31, 1972, is Rs. 26,13,441. The building has been let out to various business concerns for rent and rents as also service charges are collected from them. Till the assessment year 1972-73, the income from the building was assessed as income of the firm. For the assessment year 1973-74, the assessee-firm did not admit either the rental income or the service charges received from the property . The assessee explained the omission on the ground that the building has been transferred by the firm to its partners by virtue of an agreement and that the partners are directly in receipt of the income and the service charges from the portions of the property transferred to them and that the firm is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AAC, took the matter in appeal to the Income-tax Appellate Tribunal contending that the immovable property belonging to a firm cannot be transferred to any one including its partners during its continuance except under a document duly registered in accordance with s. 17(b) of the Registration Act. In support of its submission, the Revenue relied on the decision of the Supreme Court in CIT v. Juggilal Kamlapat [1967] 63 ITR 292, and also the decision of the Allahabad High Court in Ram Narain and Brothers v. CIT [1969] 73 ITR 423. On behalf of the assessee reliance was placed before the Tribunal upon the ruling of the Madras High Court in CIT v. Janab N. Hyath Batcha Sahib [1969] 72 ITR 528. The Tribunal held that the ruling of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case dealt with by this Court in the above decision, the transfer was effected by making book entries in the account books of the firm and, in this case, the property is said to have been divided by an agreement between the partners followed up by book entries. Therefore, substantially there is no difference between the said case and the case before us on facts. The principles of that case clearly apply to this case and, therefore, the mere agreement entered into between the partners to divide the property of the firm without there being any registered instrument transferring the property of the firm to the individual partners cannot be taken to be sufficient to transfer the legal title from the firm to its partners. The learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the assessee-firm as well as the new firm. The ITO took the view that the transfer of the buses with the route permits from the assessee-firm to the new firm amounted to a sale so as to attract s. 41(2) of the Act. When the matter went before the Tribunal, the Tribunal held that there was no sale of buses by the assessee-firm to the partnership of four persons and, therefore, there could be no assessment under s. 41(2) and also no levy of tax as capital gains. The matter was taken on a reference to this court and this court agreed with the view taken by the Tribunal that the transfer of buses cannot be taken to be a sale as contemplated by s. 41(2). The court, following the decision of this court in CIT v. Janab N. Hyath Batcha Sahib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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