Home Case Index All Cases Income Tax Income Tax + SCH Income Tax - 2023 (6) TMI SCH This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 1178 - SCH - Income TaxAddition u/s 45(1) under the head long term capital gains - Consideration received on retirement from partnership firm - Receipts as full and final settlement of its right, title and interest as a partner as having 50% share in the firm - It is the case of the appellant revenue that this is a case where the AO was right for the reason that the sum of Rs. 15 crores received by the respondent was paid in excess of the amount due to it by way of the share it was entitled under the partnership deed - High Court deleted the additions HELD THAT:- As per appellant is not a case where the amount which it has received is attributable in other words to the share which the retiring partner would be entitled in law. The amount is far in excess. Had the amount being the same as the share, the Revenue would not have raised objection. This is in addition to the fact that the amount paid to the respondent was, in fact, brought in by the three new incoming partners. This made the amount exigible to Income Tax under the head income under the capital gains u/s 45 of the Income Tax Act, 1961. As Learned senior counsel, on the other hand, would point out that actually though the amount may appear to be in excess of the share standing to the credit of the capital account of the respondent-assessee, the amount in excess is attributable to the goodwill which, according to him, is subject matter of decisions of this Court and since goodwill under the law as it stood was to be taken into consideration in determining the share of the retiring partner, no part of the amount received by the respondent-assessee was exigible to tax. From the impugned order, we do not find any discussion on any submission on the lines which has been addressed before this Court. We are of the view that the matter should, therefore, be reconsidered by the High Court with reference to the facts as are not in dispute and law which governs the field. The appeal is allowed. The impugned order will stand set aside. The case will stand remitted. The appeals will be reheard.
|