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TMI Blog1988 (2) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the assets were revalued. The revaluation was based on the certificates of the approved valuer. The assets worth Rs. 23,37,410 were revalued at Rs. 32,96,623. The excess of Rs. 9,59,213 was credited to the partners' capital accounts in their profit ratio proportion. The assessee was credited with an amount of Rs. 1,53,474 being his share. After the dissolution one of the partners, which was a company, took over the assets and liabilities at the values at which they appeared in the account books of the said firm, as at the close of the business hours on 30th Sept., 1979, after the assets had been revalued before the dissolution. It was specifically mentioned in the Deed of Dissolution that the figures of revaluation had been mutually a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) of the Act. 6. In this connection, we may refer to decision of the Supreme Court in CIT vs. Bankeylal Vaidya (1971) 79 ITR 594 (SC). In that case on dissolution of Partnership, its assets were revalued and under an agreement amongst the two partners one of them took over all the assets while the other (i.e., the assessee) was paid his share of the value of the assets in money. The ITO brought the amount to tax under s. 12B (1) of the IT Act, 1922 (corresponding to s. 45 of the Act of 1961). The Supreme Court held that arrangement between the partners of the firm amounted to distribution of assets of the firm on dissolution and that there was no sale or exchange of the assessee's share in the capital assets to the other partner and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision does not deal with this question. Hence, it is of no assistance. 9. The learned CIT(A) has also observed that the deed of dissolution was in substance deed of retirement" whereby one partner carried on the business while the other goes out". We are unable to agree with this view. We find that in substance the firm as it stood on 30th Sept., 1979 stood dissolved with effect from the close of business on that day and that from the next day, the company who took over the assets and liabilities commenced the business. This was a case of dissolution and as such provisions of s. 47(ii) were attracted. 10. Even if we assume that this is a case of retirement of all partners but one and the surviving partner, continuing the business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the assessee as his share in the assets of the firm on its dissolution as capital gains. ITA Nos. 2038, 2962 2226/Bom/85 : 12. The assessee who have filed these three appeals are (1) Shri Chandrakant C. Patel, (2) Shri Kishorekant M. Shah and (3) Smt. K.D. Parekh, respectively. All these assessees were also partners of the said firm and each of them received his/her share in the excess amount of Rs. 9,59,213. The amounts received by them were Rs. 95,921, Rs. 1,43,882 and Rs. 95,921, respectively. The question raised in each of these appeals is the same, viz., whether the amount received by each partner on dissolution of the said firm attracted the provisions regarding capital gains tax. The point is the same as has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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