TMI Blog1958 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and the price which the partnership firm agreed to pay for the land represents the profit of the assessee. 2. The assessee contracted to purchase certain lands for ₹ 41,500. Before the sale deed was executed, he entered into a partnership agreement with one Datar and the business of that partnership was to develop the land and sell it. The assessee's contribution towards the capital of the firm was ₹ 36,000 and Datar's contribution was ₹ 24,000. Their shares in the profits and losses of the business were in the same proportion. The partnership firm took over the land from the assessee at the agreed price of ₹ 90.000 and the land was conveyed to the name of the partnership firm by the vendor of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the land had been taken over by the partnership for ₹ 90,000 and not ₹ 60,000. 4. The case was referred to a third Member and the points which the third Member was asked to decide were these : (1) Whether on the facts and circumstances of the case, any taxable income accrued to the assessee ? (2) If so, whether the amount is ₹ 48,500 or ₹ 18,500 ? 5. The third Member of the Tribunal reached the conclusion that the land had been sold at ₹ 90,000. He also expressed the view that the assessee had by the sale made a profit on paper amounting to ₹ 48,500 . Then he added : I think it is true that the partnership is a separate entity for Income Tax purposes but a partner cannot be dissociat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been said before us by Mr. Samarth, learned counsel for the assessee. It has, however, been the endeavour of Mr. Samarth to support the order passed and the directions given by the third Member and on which the second question, which we are asked to determine, has been raised. After reaching the conclusion that at the time of the transfer to the partnership the assessee had only secured for himself the profit of ₹ 19,400, the third Member made certain observations and gave certain directions which are as under : In a case like this, it would nor be fair for an assessee to be called upon to pay tax in respect of the whole of the item of ₹ 48,500 in one year. It has been laid down by the High Court that an assessee has a righ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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