TMI Blog1971 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial year 1950-51. There was a joint venture run by one Messrs. Bhagwan Raja Patel Co. and Messrs. Premier Suppliers Ltd., for purchase and sale of machinery from the disposal department of Assam, and each was having half share in the joint venture. On the 22nd October, 1949, Messrs. Premier Suppliers Ltd. sold their interest in the venture to the assessee-company and Messrs. Bhagwan Raja Patel sold their interest to Patel Engineering Co., so that the persons now interested in the venture were the assessee-company and Messrs. Patel Engineering Co. Ltd. The stock of the disposal machinery remaining unsold were thereafter divided between the assessee and Patel Engineering Co. Ltd. The assessee received machinery valued at Rs. 2,06,372 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the aforesaid sum of Rs. 4,00,000 could not be treated as the assessee's profits on the ground, inter alia, (1) that the assessee had never dealt in the purchase and sale of machinery either before or after ; (2) that the capital appreciation by Rs. 4 lakhs was made in the financial year 1949-50, which was not the relevant accounting year for the purpose of assessment for the year in question ; and (3) that the disposal machinery which were acquired at Assam were mainly for the purpose of executing their own contracts, namely, the contracts of earth work, etc., which required such machinery as had been obtained and not for sale. The Income-tax Officer held, disagreeing with the assessee's contention, that it was a sale of machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Homi Mehta's Executors and upon the reasons given by him in paragraph 4 of his order, be held as aforesaid and on such conclusion deleted the addition of Rs. 4,00,000 from the assessee's income. The department being aggrieved by the said decision of the Appellate Assistant Commissioner preferred an appeal to the Tribunal which held that there could be no element of transfer or sale involved in a transaction between one's own self. The Tribunal observed that the capital in the partnership firm between the assessee and the aforesaid Messrs. Patel Engineering Co. Ltd. was comprised of the written up value of the machinery which fell to each of the above mentioned partner's shares. The value of those machinery had not been written up in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et out in the statement of case. There is no need to restate them. The finding of the Tribunal was that there was no sale either at the time when the assessee inflated the price of the machinery which fell to its share at the time of the division or at the time when the new partnership was created. Same is the finding of the High Court. We agree with these findings. The machinery that fell to the share of the assessee was never sold. Therefore, there was no question of the assessee making any profit out of them. No one can sell his goods to himself. A sale contemplates a seller and a purchaser. If a person revalues his goods and shows a higher value for them in his books, he cannot be considered as having sold these goods and made profits t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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