1972 (8) TMI 30

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....5, the petitioner purchased an X-Ray machine for Rs. 32,000. He started an X-Ray clinic in the name of M.S. Kackkar's X-Ray Home. Depreciation was allowed to him on the value of the X-Ray machine in the assessment years 1954-55 onwards until the written down value became nil. Thus, in the assessment years 1963-64 and 1964-65, no depreciation was allowed. During the previous year, relevant to the a....

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....h the sum of Rs. 20,000 came to be credited in his capital account. The Income-tax Officer, however, still thought that the sum of Rs. 20,000 was chargeable to tax under section 41(2) of the Act. The assessee filed a revision before the Commissioner of Income-tax which was dismissed. Hence, this petition. The only question which falls for consideration is as to whether the sum of Rs. 20,000 can b....

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....e X-Ray machine was a business asset which was previously being used by the petitioner in his profession. The written down value of the machine being nil, a sum of Rs. 20,000 would be taxable as profit under section 41(2), if the machine had been sold for that amount. The contention of the department is that, in the circumstances, the X-Ray machine should be deemed to have been sold to the firm fo....

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....d. There it was observed : " If a person revalues his goods and shows a higher value for them in his books, he cannot be considered as having sold those goods and made profit therefrom. Nor can a person by handing over his goods to a partnership of which he is a partner as his share of the capital be considered as having sold the goods to the partnership. " Thus, there being neither sale nor exc....