1960 (2) TMI 49

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....iness in hardware, entered into a partnership with one A. M. Mohamad Abbas for importing scrap iron worth about Rs. 2 lakhs and selling the same in this country under an agreement, dated 13th April, 1950, a copy of which is annexure ' A ' and forms part of the case. The assessee himself went to Malaya on behalf of the firm and purchased scrap iron. After the goods were so acquired, the Government of India did not grant permission to the firm to sell this stock. On 31st December, 1950, the partnership was dissolved and a deed, dated 5the January, 1951, the partnership was dissolved of, a copy of which is annexure " B " and forms part of the case. One of the recitals in this deed says :        &nb....

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.... payment of Rs. 31,000 will, therefore, be treated or capital asset. The entire sum of Rs. 31,000 will, therefore, be treated as the assessee's share of revenue profits assessable in his hands under business. " 4. The Appellate Assistant Commissioner on appeal wrote as follows :             " I find that since the firm did not get a permit for selling the stock which had been brought from Malaya no sale was effected till the date of the dissolution of that firm. The appellant's share of profit will be a share in the profit if the accounts were closed on 31st December, 1950. Since the stock was remaining unsold on that date there could not have been any profit till then. Th....

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....he joint venture to his co-venturer and that it was assessable in his hands in the normal manner. 7. On these facts, the assessee had raised a number of questions, but we think it is enough if the following question is referred :              " Whether there were materials for the Tribunal to hold that the aforesaid sum of Rs. 31,000 or any part thereof was profit that accrued to the assessee assessable under the Income-tax Act. " P. Sharfuddin for the assessee. C. S. Rama Rao Sahib and S. Ranganathan for the Commissioner.    JUDGMENT RAJAGOPALAN J.- In form and virtually in substance the Rs. 31,000 paid to the assessee by his partner Abbas was compensat....