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2014 (12) TMI 1175 - AT - Income TaxTaxability for amount received from partnership firm on retirement, as per mutual agreement - treaed as capital gains chargeable to tax - Held that:- Hon’ble Gujarat High Court in CIT vs. Mohan Bhai Pama Bhai (1971 (9) TMI 56 - GUJARAT High Court) held that no transfer is involved when a retiring partner receives at the time of retirement from the firm, his share in the partnership asset either in cash or any other asset. The ratio laid down in P.H. Patel (1987 (8) TMI 40 - ANDHRA PRADESH High Court ) wherein it was held that when a partner retires from a partnership taking his share of partnership interest, there is no element of transfer of interest in the partnership asset by the retiring partner. Therefore, considering the totality of facts and the circumstances by applying the ratio laid down by Hon’ble jurisdictional High Court in the case of Riyaz A. Shekh [2013 (12) TMI 248 - BOMBAY HIGH COURT] wherein held Amounts received on retirement by a partner is not subject to capital gains tax - Decided against Revenue Deduction u/s 54 - Held that:- As there is uncontroverted finding in the impugned order that all the payments to the contractors were by cheque only, thus as per the provisions of section 54(2) of the Act, the assessee was to invest the capital gains as per the provision of the Act, we find no infirmity in granting deduction u/s 54 to the extent mention in the order thus we find no substance in the appeal of the Revenue. - Decided against Revenue
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