TMI Blog2009 (12) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... - 4-12-2009 - RAMACHANDRAN NAIR C. N., MOHANAN V. K. JJ JUDGMENT C. N. Ramachandran Nair J.- The question raised in the connected appeals is whether the Tribunal was justified in holding that the respon- dent-assessee is not liable for payment of tax on capital gains on the dis- tribution of assets on the dissolution of the firm. We have heard senior standing counsel appearing for the appellant and advocate Sri P. Bala- krishnan appearing for the respondent. 2. A firm was constituted with four partners to take over 14.25 cents of land and a building thereon for running lodging business by the assessee- firm. The firm was constituted on July 1, 1979, and continued its business up to the assessment for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evisional orders under section 263 holding that the entire transaction attracts tax on capital gains under section 45(4) of the Act. The assessee's appeal on the levy of capital gains on land value was allowed by the Commissioner of Income-tax (Appeals) and, therefore, the Revenue filed a second appeal against the said order. Against the order issued by the Commissioner under section 263, the assessee also filed an appeal before the Tribunal. The Tribunal after hearing both the appeals and the cross-objection filed by the assessee, decided the appeals in favour of the assessee holding that the reference to valuation was not justified and, therefore, the assessment of capital gains does not arise. 3. After hearing both sides and after go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew, is also not correct. In fact, section 55A authorises the Assessing Officer to refer any capital asset for valuation to find out its fair market value for the purpose of assessment of capital gains under Chapter IV-E of the Act. We notice that the decision of the Supreme Court relied on by the Tribunal is not applicable on the facts of the case. Further, in our view, in order to make an assessment under section 45(4), the Assessing Officer is free to refer any asset for valuation because when the transfer value shown is the book value, necessarily the fair market value has to be determined for the purpose of determination of capital gains. Even though the assessee again contended that the depreciated value is the fair market value, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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