TMI Blog2011 (3) TMI 1656X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the facts of the case. Deleting the addition of ₹ 8,79,120 made by the Assessing Officer on account land received by the assessee on retirement from the firm after having taken market value of the land that was not disclosed in the computation of income, by holding that the provisions of section u/s. 45(4) of the IT Act attract only in the case of firm, even when the Assessing Officer made addition under the head income from other sources, being unexplained/undisclosed income, not under the head capital gain and has taken the value of property on the basis of DLC rate being prevalent fair market value. 2. The assessee is a partner of the firm filed return of income declaring an income of ₹ 1,01,178. As per the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise of the issue pertaining to revaluation of assets can be discussed in the case of partnership firm. The provision of Income Tax Act is self-contained so far as partnership firm is concerned and has no relevance and application in the instant case of assessee. My view is further fortified by the direct ruling pronounced in the case of ITD Vs. Ramesh M. Shah (2004) 2 SOT 558 (Mum) that amount credited in capital account of retired partner upon revaluation of assets of firm is not taxable as capital gain as there is no transfer. Further the contention of appellant finds force from case of Supreme Court Vs. Ellis Bridge 95 Taxman 143 (SC) that charging section be construed strictly if a person has not been brought within the ambit of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the partner. The revaluation entry in the books of accounts of the firm is a notional and unilateral act. As per the provisions of section 10(2)(a), partner s share in the total income of the firm is exempt. Therefore, the provisions of section 45(4) relate to the case of partnership firm only and not that of its partners. Any amount credited in the capital account of a retired partner upon revaluation of assets of firm is not taxable as a capital gain as there is no transfer. In the case of CIT Vs. R. Lingmallu Raghukumar (247 ITR 801) (SC), it was held that there was no element of transfer of interest in partnership assets by the retired partner to the continuing partners and the amount received by him was not assessable to capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. The learned CIT(A) after considering the submissions of the assessee deleted the addition made by the Assessing Officer. The relevant portion of the CIT(A) order is extracted hereunder : I have gone through the assessment records and the detailed arguments. After having vetted the contention of both the parties I am of the opinion that the source of land stands established beyond the shadow of doubt since the firm which has given the land to its partner at the time of retirement in settlement of his individual account, has confirmed the position. As for the understatement of the reported consideration the onus and accountability solely and exclusively vet upon the transferor. The provision of section 50C of the I.T. Act consti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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