TaxTMI 
TaxTMI 
2015 (12) TMI 1174
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.... 4. The CIT(A) erred in construing the deed of retirement, under 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 Assessin....
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....ed before us, inter alia, submitting that CIT(A) should have allowed the appeal of assessee. For the same assessee raised various legal and factual 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 ....
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.... strength, latter judgement may be followed specially when the earlier judgement is referred while deciding the matter in latter judgement. The same has happened 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'....
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....Hon'ble Supreme Court the following proposition emerges: - "(a) It is immaterial that in a previous litigation the particular petitioner before the Court was or was not a party, 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 anomal....
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....are payable by an erstwhile partner on amounts received on retirement would not be applicable to the present case. The only submission on behalf of the revenue is that there was an earlier decision of this Court in the matter of N.A. Mody V/s. CIT reported in [1986] 162 ITR 420 and it has not been considered in the decision rendered in the matter of Prashant S. Johsi (supra). 3. In the impugned order, the Tribunal does refer to the decision of this Court in the matter of N.A. Mody (supra) and states that it follows the decision of this Court in the matter of CIT V/s. Tribhuvandas G. Patel reported in 115 ITR 95 and the same has been reversed by the Apex Court in Tribhuvandas G. Patel V/s. CIT reported in 263 ITR 515. This Court in the matter of Prashant S. Joshi (supra) has also referred to the decision of Tribuvandas G. Patel (supra) rendered by this Court and its reversal by the Apex Court. Moreover, the decision of this Court in the case of Prashant S. Joshi (supra) placed reliance upon the decision of the Supreme Court in the case of CIT V/s. R. Lingamallu Rajkumar reported in [2001] 247 ITR 801, wherein it has been held that amounts received on retirement by a partner....