TMI Blog1967 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to carry on business in partnership as exhibitors of cinematograph films in the name and style of Dewas Cine Corporation with effect from March 1, 1947. Each partner, who was an owner of a cinematograph theatre, brought his theatre into the books of the partnership as an asset of the partnership. For the assessment years 1950-51 to 1952-53 the Income-tax Officer allowed depreciation aggregating to ₹ 44,380 in respect of the two theatres. The partnership was dissolved on September 30, 1951, and on dissolution it was agreed between the partners, that the theatres should be returned to their original owners. In the books of account maintained by the partnership, the assets were shown as taken over on October 1, 1951, at the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value. . . . Provided further that where the amount for which any such building, machinery or plant is sold, whether during the continuance of the business or after the cessation thereof, exceeds, the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profits of the previous year in which the sale took place. In respect of each of the theatres depreciation was allowed by the taxing authorities in proceedings for assessment. The Income-tax Appellate Tribunal was of the view that since the theatres were returned to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets. On dissolution of the partnership, each theatre must be deemed to be returned to the original owner, in satisfaction partially or wholly of his claim to a share in the residue of the assets after discharging the debts and other obligations. But thereby the theatres were not in law sold by the partnership to the individual partners in consideration of their respective shares in the residue. The expressions sale and sold are not defined in the Income-tax Act : those expressions are used in section 10(2)(vii) in their ordinary meaning. Sale , according to its ordinary meaning, is a transfer of property for a price, and adjustment of the rights of the partners in a dissolved firm is not a transfer, nor it is for a price. The Sol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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