TaxTMI 
TaxTMI 
2015 (12) TMI 1174
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....nder which no transfer had taken place, and without transfer there can be no Capital gains tax liability." 2. Assessee is an individual and she joined on 16.09.2005 a partnership firm M/s. D.S. Corporation as a partner having 20% profit sharing ratio therein. She retired from the said partnership firm M/s. D.S. Corporation on 27.03.2006. At the time of retirement she received a sum of Rs. 30,87,98,088/- from the said firm M/s. D.S. Corporation. However, as observed by the learned Assessing Officer, the assessee did not disclose the aforesaid receipt of Rs. 30,87,98,088/- as her income in the relevant assessment year 2006-07. Search & Seizure action u/s. 132 of the Act were carried out in assessee's premises on 18.01.2007. Notices u/s. 153A, under section 143(2) and 142(1) of the Act were issued and duly served upon the assessee. Assessee was confronted and requested to explain as to why the amount received in excess of principal capital contribution amounting to Rs. 30,87,98,088/- from the said firm M/s. D.S. Corporation should not be treated as short term capital gain and brought to tax. The concerned Assessing Officer has considered the submission on behalf of assessee but did n....
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....al submissions and requested to allow the claim of assessee prayed. On the other hand the learned D.R. supported the order of Assessing Officer and submitted that the order of ITAT in the case of Shri Sudhakar Shetty should be followed because it is based on the similar facts. 4. After going through rival submissions and material on record we find that the Tribunal in the case of husband Shri Sudhakar Shetty has decided the issue against the assessee by observing as under: - "2.5 In the light of the above, more specifically, when the issue has been settled by the Hon'ble jurisdictional High Court, we find merit in the appeal of the assessee. The Hon'ble Apex Court as discussed by the Hon'ble jurisdictional High Court in the aforesaid case also, in CIT vs. R. Lingamallu Rajkumar (2001) 247 ITR 801 held that amounts received on retirement by a partner is not subject to capital gains tax. Our view is also fortified by the decision by the Coordinate Bench in ACIT vs. Shri N. Prasad, Executive Chairman Secunderabad (ITA No. 1200/Hyd/2010) order dated 27/10/2014." 5. In this regard the learned Authorized Representative for the assessee requested that after the decision wa....
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....d in assessee's case. After the judgement in the case of Shri Sudhakar Shetty decided on 9th September, 2010 by "E" Bench, the similar matter was decided by the "E" Bench in the case of R.F. Nangrani, HUF vs. DCIT in ITA No. 6124/Mum/2012 on 10th December, 2014 wherein the decision in the case of Shri Sudhakar Shetty was also referred. In the said case the issue before the Tribunal was whether the amount of Rs. 14,15,61,370/- received from partnership firm Landmark Developments on retirement is a capital gain chargeable to tax? This issue was very similar to the issue in the case before us. While deciding the same ITAT "E" Bench, Mumbai in R.F. Nangrani, HUF (supra) reversed its own decision taken in the case of Shri Sudhakar Shetty and decided the matter in favour of the assessee. While deciding the matter ITAT observed as under: - "2.5 In the light of the above, more specifically, when the issue has been settled by the Hon'ble jurisdictional High Court, we find merit in the appeal of the assessee. The Hon'ble Apex Court as discussed by the Hon'ble jurisdictional High Court in the aforesaid case also, in CIT vs. R. Lingamallu Rajkumar (2001) 247 ITR 801 held that amo....
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....ty, but if law on a particular point has been laid down by the High Court, it must be followed by all authorities and Tribunals in the State. (b) The law laid down by the High Court must be followed by all authorities and Tribunals when it has been declared by the highest court in the State and they cannot ignore it either in initiating proceedings or decision on the rights involved in such a proceeding. 8. In this regard, we find that the Hon'ble Bombay High Court in the case of Siemens India Ltd. & Anr vs. K. Subramanian, Income tax Officer (1983) 34 CTR 23 observed in para 24 of their order as under: "24. ......... In East India Commercial Co. Ltd. vs. Collector of Customs, Calcutta, AIR 1962 SC 1893, the Supreme Court held that an administrative authority or Tribunal cannot ignore the law declared by the highest Court in the State. The Supreme Court pointed out that taking into consideration the provisions of Arts. 215, 226 and 227 of the Constitution it would be anomalous to suggest that a Tribunal over which the High Court had superintendence can ignore the law declared by that Court and start proceedings in direct violation of it, the result being that if a Tribunal....