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2014 (2) TMI 679 - AT - Income TaxChargeability of amounts – Amount received from other continuing partners – Share in partnership – Held that:- Assessee contended that there are separate rights and the right to share in partnership (goodwill) is separate for which no cost was paid and provisions of section 55(2)(b) are not applicable as it is a professional firm - The decision in A.R. Krishnamurthy vs. CIT [1989 (2) TMI 2 - SUPREME Court] followed - The determination of the cost of the right to excavate clay in the land in terms of money may be difficult but was nonetheless of a money value and the best valuation possible must be made - Once the cost of the leasehold rights was determined then there was no difficulty in making apportionment - The value of leasehold rights in the cost of acquisition of land being determinable, the computation provisions under the Act were applicable and section 45 would be attracted - The computation made by AO is approved for taxing the amounts received from the other three continuing partners by the retired partner (assessee ) – thus, there is no need to consider the alternate contentions that provision of section 55(2b) are not applicable - the facts indicate that the share in assets and goodwill are non-separable rights acquired at the time of admission by paying cost, the same is liable to tax under the provision of capital gain – Decided against Assessee. Error in computation of Capital gain – Held that:- On examination of computation of income, assessee’s contention is found to be correct - Assessee offered short term capital gain on transfer of receipts in share of assets of partnership - Assessing Officer included the consideration received again in his working while determining the capital gains on both rights of share in asset/goodwill - Thereafter, the capital gain offered was again brought to tax (as per statement) - Thus, the amount was brought to tax twice – thus, the AO is directed to exclude the amount at the time of passing order – Decided in favour of Assessee.
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