TMI Blog2003 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... re answered in the affirmative, i.e., in favour of the assessee and against the Revenue. - - - - - Dated:- 7-8-2003 - Judge(s) : D. H. WAGHELA., D. A. MEHTA. JUDGMENT The judgment of the court was delivered by D.A. MEHTA J.-This reference under section 256(2) of the Income-tax Act, 1961 ("the Act"), is at the instance of the Revenue and the following three questions have been referred by the Income-tax Appellate Tribunal, Ahmedabad Bench "A" for our opinion: "1. Whether, in law and on facts, the Appellate Tribunal was justified in entertaining miscellaneous application filed by the assessee and allowing the same by quashing the order of the Commissioner (Appeals) by holding that the transaction did not result in taxable capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred to the partnership firm and accordingly capital gains were assessed in the hands of the assessee. The assessee, being aggrieved from the aforesaid assessment order, carried the matter in appeal before Commissioner of Income-tax (Appeals), Rajkot. The Commissioner of Income-tax (Appeals), for the reasons stated in his order dated February 19, 1986, confirmed the order of the Assessing Officer placing reliance upon the decision of the Supreme Court of India in the case of McDowell and Co. Ltd. v. CTO [1985] 154 ITR 148. According to the Commissioner of Income-tax (Appeals), the entire exercise of conversion of capital assets into stock-in-trade was a legal device to avoid tax and hence the Assessing Officer had rightly treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest of the partner in personal asset is reduced, on their entry into the firm into a shared interest. The second proposition is to the effect that the consideration for the transfer of the personal asset is the right which arises or accrues to the partner during the subsistence of the partnership to get his share of the profits from time to time and, after the dissolution of the partnership or with his retirement from the partnership, to get the value of his share in the net partnership assets on the date of dissolution or retirement, after deduction of liabilities and prior charges. Therefore, the consideration which a partner acquires on contributing an asset to the firm as capital cannot fall within the terms of section 48 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rashtra Kutch Stock Exchange Ltd. [2003] 262 ITR 146. One of the basic principles laid down by this court is that non-consideration of a judgment of the jurisdictional High Court or the apex court would always constitute a mistake apparent from the record, regardless of the judgment being rendered prior to or subsequent to the order proposed to be rectified. In the present case, admittedly, the decision in the case of Sunil Siddharthbhai [1985] 156 ITR 509 (SC) was referred to by the Tribunal while passing the order under section 254(1) of the Act dated November 27,1986, but the Tribunal failed to record a finding in relation to the second proposition of law enunciated by the Supreme Court in the said decision. Hence, the Tribunal was perfe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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