9911796707
TMI Blog1996 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter referred to as "I.T. Act"), at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer of this court : " Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the amount of Rs. 70,000 paid to one of the partners who was ousted from the benefits of partnership was a revenue expenditure and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case. Smt. Qamrunnissa challenged that action of the two partners by commencing legal proceedings in that behalf and the matter was settled between the parties on November 11, 1987, and Smt. Qamrunnissa was paid Rs. 70,000 on account of her share in the partnership firm. The terms of the settlement were recorded in the books of the assessee-firm by making an entry which was signed by the partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim. Therefore, the assessee went in appeal and the appellate authority allowed the appeal holding that the amount of Rs. 70,000 which was paid to Smt. Qamrunnissa was not a capital asset or for the benefit of the business. It is held that the payment made to Smt. Qamrunnissa was under the sole statutory liability under section 37 of the Indian Partnership Act and the same was debited to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of a retiring partner. Smt. Qamrunnissa was a partner in the earlier firm, Star Agency, and that firm was dissolved and a new firm, Delhi Beedi Sales Agencies, was constituted leaving the third partner ; therefore, she had to resort to legal proceedings and in that a settlement was arrived at and as per the terms of the settlement reproduced above, the amount of Rs. 70,000 was paid to her for u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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