TMI Blog2013 (10) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... e business concern to the new partners, but have chosen to continue for some time and at their leisure, they retired from partnership one after the other. Therefore, the assets and liabilities of the firm continued as such without any change including tangible and intangible. Share of the capital came to be paid to the retiring partner and it cannot be treated as cost paid to the retiring partner towards acquisition of any right from him. Partner who retire from the partnership firm takes its initial investment and profit, if any, payable to him. Similarly, if he is accountable for any loss in a particular assessment year, that would also be worked out at the time of retiring from partnership business - In view of the matter, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her money paid as transfer of goodwill to a partner, who was retiring, could be claimed as depreciation in that assessment year by the partnership firm? According to learned counsel for the appellant, Tribunal was not justified in disallowing such claim opining that under common law, partnership firm may not be a legal entity, though under the Income Tax Act it is an independent and separate assessable unit. Facts in the present case are to the effect that initially four partners constituted the partnership firm in the business of pharmaceuticals and continued so. Later, three partners entered and the partnership consisted of seven partners. Subsequently, in four consecutive assessment years earlier four partners one by one retired from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fourth year, only three new partners continued to run the business of pharmaceuticals. The question is whether the previous owner has transferred goodwill to the appellant assessee and the benefit derived from the appellant assessee is retention of continued trust of the customers, who were customers of the previous owners. When one partner retires from the business, there is no severance of status so far as the partnership is concerned, as the retiring partner would take his capital investment and retire from partnership and the others continue to carry on the business. By adopting this method, four partners, who decided to go out of the business, have not transferred the entire business concern to the new partners, but have chosen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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