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2018 (12) TMI 466

Sale of land - Assessment in hands of partnership firm v/s partners - letter written by the partners, they were no more the owners of the property in question from the date of retirement namely 6.6.1978 - relinquishment of rights of partners - Held that:- Partners have stated in the sale deed that they have relinquished their right does not pre-suppose that any right existed in them as on that date. The partners could relinquish only which they possess. The sale deed was executed on 14.2.2001. The partners retired on 6.6.1978. Therefore, they had no right at all which they could relinquish. Therefore, in the absence of possessing any legal right, the question of relinquishment does not arise for consideration. Therefore, such a contention c .....

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d does not call for any interference - Decided in favour of the revenue - Income Tax Appeal No. 82 of 2010 - Dated:- 28-11-2018 - MR. RAVI MALIMATH AND MR. K.NATARAJAN JJ. APPELLANT (BY MISS. PRIYA V., ADVOCATE FOR SRI G.K.V. MURTHY, ADVOCATE) RESPONDENT (BY SRI K.V. ARAVIND, ADVOCATE) J U D G M E N T RAVI MALIMATH, J. The assessee is a partnership firm in the name and style of M/S.Srinivasa Enterprises . Sri.N.A.Venugopal and N.A. Ravigopal were the owners of immovable properties situated at Doddaballapur. They had purchased the same under a separate Sale Deed in the year 1973. They constituted a partnership in the name of M/S.Srinivasa Enterprises along with 12 others in terms of the Partnership Deed dated 26.11.1976. A Theatre by name Go .....

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land at ₹ 33 lakhs and building at ₹ 11.70 lakhs. The assessee was intimated about the valuation and proposed to compute long term capital gains in respect of the land and short term capital gains in respect of the building including fixtures and furniture. Thereafter, the long term capital gains at ₹ 23,25,600/- and short term capital gains at ₹ 10,10,537/- were computed. Aggrieved by the same, the partners filed an appeal before the Commissioner of Income Tax (Appeals), which was dismissed. The appeal filed by the partners before the Income Tax Appellate Tribunal was also rejected. Hence, this appeal. 3. By the order dated 17.3.2010, the appeal was admitted to consider the following substantial questions of law: i) .....

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hat the Tribunal has committed an error in passing the impugned order. The material on record would clearly indicate that part of the sale consideration was paid to the erstwhile partners, therefore, that amount cannot be taxed in the hands of the assessee since the sale has been effected by the erstwhile partners. Therefore, it cannot be considered that the property stood in the name of the partnership firm. That the computation of the capital gains is erroneous. 5. The same is disputed by the counsel for the revenue. 6. Heard learned counsels. 7. The contention of the assessee is that the erstwhile partners namely Venugopal and Ravigopal were the only owners of the land and therefore the income that is assessed in the name of the firm, re .....

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pute and settle the matter, the share of the vendor in the schedule property is determined as ₹ 1,00,000/- to vendor No.1 and ₹ 1,00,000/- to vendor No.2 and that they agreed to relinquish their rights by executing the deed. It is therefore contended that the letter runs contrary to the deed of sale dated 14.2.2001. 10. In terms of the letter written by the partners, they were no more the owners of the property in question from the date of retirement namely 6.6.1978. Therefore, merely because they have stated in the sale deed that they have relinquished their right does not pre-suppose that any right existed in them as on that date. The partners could relinquish only which they possess. The sale deed was executed on 14.2.2001. T .....

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facts of the case. 13. So far as placing reliance by the respondent on the report received from the jurisdictional Sub-Registrar is concerned, the same is in accordance with law. That the fair market value of the capital asset has been determined based on the rules as specified by the Sub-Registrar. Even when repeated requests were made, there was no valuation furnished by the assessee. Therefore, the Assessing Officer had no other option but to obtain the fair market value from the jurisdictional Sub-Registrar who was authorised to furnish the same. 14. So far as the sale is concerned, whether the entire consideration were received in the hands of the assessee or not becomes a secondary question. It is only an adjustment by the assessee wi .....

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