9911796707
TMI Blog2006 (6) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. I.T.A. No. 123/00 is an appeal filed by the Commissioner of Income-tax, Cochin, under section 260A of the Act challenging annexure D order of the Income-tax Appellate Tribunal passed in I.T.A. No. 187/Coch/1994 in the matter of the assessment of the respondent, C.F. Raju. Both the proceedings relate to the assessment year 1989-90. The Tribunal had, inter alia, accepted the contention of the assessees that there was no evidence of the assessees having obtained a sum of Rs. 10,00,000 (rupees ten lakhs) by way of pakidi from their tenant one Sundaresa Pai to whom the ground floor of a commercial building situated by the side of M.G. Road, Ernakulam, was let out as per an unregistered lease deed executed on February 10, 1989. We heard se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount over and above the sum of Rs. 2 lakhs recited in the document of lease. In the absence of any circumstance to indicate receipt of any amount by way of pakidi by the assessees, it is not permissible to draw inferences founded on mere conjectures to conclude that the assessees had received a sum of Rs. 10 lakhs by way of pakidi. The solitary piece of material namely the sworn statement by Sundaresa Pai was not put to the assessees nor were they given an opportunity to cross-examine the said Sundaresa Pai. Hence, the Tribunal was right in dislodging the findings reached by the assessing authority and the appellate authority that the assessees had obtained a sum of Rs. 10 lakhs by way of pakidi and that the said amount was liable to be ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or (vi) any transaction (whether by way of becoming a member of, or, acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation.-For the purposes of sub-clause (v) and (vi) 'immovable property' shall have the same meaning as in clause (d) of section 269UA." Thus, any transaction by way of any agreement or arrangement which has the effect of transferring or enabling the enjoyment of any immovable property is a transfer within the meaning of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the present case. In the above decision, the proposition of law that was laid, down was that in a case where there is no registered document of transfer by the assessee partner of his immovable property in favour of the firm in which he is a partner, there is no liability to capital gains. This legal position is well settled. When a partner makes over his personal asset to the firm in which he is a partner, there is no transfer involved. Similarly distribution of surplus properties of the dissolved firm among the partners after settlement of accounts also does not involve any transfer and does not require registration (vide Addanki Namyanappa v. Bhaskara Krishnappa, AIR 1966 SC 1300, CIT v. Juggilal Kamalapat [1967] 63 ITR 292 (SC); AI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at even the search conducted in the premises of one of the assessees on the very same day on which the premises of Sundaresa Pai, the tenant were searched, did not yield any material to indicate receipt of Rs. 10 lakhs allegedly paid to the assessees. It is true that the assessees did not have the opportunity of challenging the sworn statement given by the tenant. But the fact that about 1350 square feet of commercial premises with all amenities on the ground floor of a three-storeyed building bearing Cochin Corporation Door No. 38/2154 situated in a prime location near the Jayalakshmi Textile Shop and by the side of M.G. Road, Ernakulam, were let out by the assessees to Sundaresa Pai on February 10,1989, fixing a monthly rent of Rs. 5,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the principles of natural justice, the proceedings do not come to an end. Upon the quashing of the order the matter will stand restored to the stage prior to the one at which the order impugned was passed. We are therefore inclined to give the Revenue an opportunity to pursue its case by following a fair procedure. It is well-settled that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision, the appeal is preferred, to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute. Since we are of the considered view that the Revenue should be gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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