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2015 (12) TMI 96 - AT - Income TaxValuation of property - capital gain computation - whether fair market value as on the date of dissolution of the firm shall be taken into consideration - rectification of mistake - Held that:- This Tribunal is of the considered opinion that when the partnership was dissolved, the asset of the firm has to be valued on real basis i.e at market value, and not at cost price. As observed in A.L.A Firm vs CIT [1991 (2) TMI 1 - SUPREME Court] the value reflected in the books of account cannot reflect the fair market value. Therefore, the property has to be valued on the date of dissolution in view of this judgment of the Apex Court which was not brought to the notice at the time of hearing of the appeal. This Tribunal is of the considered opinion that there is an error in the order of this Tribunal dated 26.6.2015. Accordingly, in exercise of the jurisdiction conferred on this Tribunal u/s 254(2) of the Act, the order of this Tribunal dated 26.6.2015 is rectified as follows: At page 6, para 7, the following shall be deleted: "Now coming to the valuation, the Assessing Officer has rightly taken the value as reflected in the balance sheet of the partnership firm and it was confirmed by the CIT(Appeals). Therefore, this Tribunal do not find any infirmity in the order of the lower authority and accordingly, the same is confirmed." Now the following shall be inserted as para 7: "7. Now, coming to the valuation, admittedly, there was dissolution of the firm and the partnership firm ceased to exist. Therefore, as observed by the Apex Court in A.L.A Firm vs CIT, [1991] 189 ITR 285, the value of the asset has to be revalued and the fair value on the date of dissolution has to be taken into consideration. As observed by the Apex Court, the partner of the firm being a commercial man, will value the asset only on real price and not at cost or at any other value. Therefore, this Tribunal is of the considered opinion that the Assessing Officer shall find out the fair value/market value of the property as on the date of dissolution of the firm i.e 20.2.2007 and thereafter compute the capital gains in accordance with law. In the result, the appeal of the assessee is partly allowed
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