TaxTMI 
TaxTMI 
2017 (9) TMI 1732
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....ribution to the partnership assets. 3 A partnership deed was executed on 1st April 2011 by seven partners including respondent Assessee and the capital contribution of the respondent Assessee was shown to be Rs. 2,98,00,000.00. On or about 29th June 2011, the partnership firm was converted into a private company limited by shares. Upon such conversion, the assets of the partnership firm stood vested in the company and the shares were allotted to the partners in the proportion of their share in the assets of the partnership firm. 4 Before the private limited company was constituted, the shares of the partnership firm had been revalued. According to the respondent Assessee, the revaluation was done on or about 29th May 2011. The Assessing Officer, however, passed an order of assessment computing capital gains on the basis of the revalued value of assets. 5 The only question before the Tribunal was whether assessment would have to be done on the basis of the value of assets as on 1st April 2011 when partnership firm was constituted or revalued value of assets. In this context, it would be perhaps pertinent to note that it is the contention of the Revenue that assets were actu....
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....ate of the transfer shall be deemed to be full value of consideration received or accrued as a result of the transfer of capital asset." 8 From the statement in the memorandum explaining the clauses to the Finance Bill, as also the said circular No.495 dated 22nd September 1987, it is patently clear that it was the legislative intent that, for the purpose of computing the capital gains, value of assets recorded in the books of the firm on the date of transfer would be deemed to be the full value of consideration received or accrued as a result of the transfer. 9 In the backdrop of the aforesaid legal position, the question is what was the value of the assets as on 1st April 2011? The value would necessarily have to be the value as recorded in the books of the firm as on 1st April 2011, i.e., the value before the revaluation. More over, as observed above, the learned Tribunal arrived at a factual finding with regard to the value of the assets transferred to the partnership as on 1st April 2011 and rejected the contention of the Revenue that the value of the assets as revalued would have to be taken into consideration. The learned Tribunal having factually determined the value ....
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....y the Appellate Tribunal, by reason of a decision on such question of law as is referred to in sub-section (1). (7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908) relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section." 11 An appeal lies under Section 260A of the Income Tax Act, only when there is a substantial question of law. We find that there is no question of law involved in this appeal much less any substantial question of law. 12 In Sir Chunilal V. Mehta & Sons Ltd. vs Century Spg. & Mfg. Co. Ltd., reported in AIR 1962 SC 1314, the Supreme Court agreed with and approved a Full Bench Judgment of this Court in Rimmalapudi Subba Rao vs Noony Veeraju And Ors reported in AIR 1951 Mad 969 and laid down the principles for deciding when a question of law becomes a substantial question of law. 13 In Hero Vinoth Vs. Seshammal reported in (2006) 5 SCC 545, the Supreme Court followed Sir Chunilal V. Mehta & Sons (supra) and other judgments and summarized the tests to find out whether a given set of questions of law were mere questions of law or substantial q....
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....aised in the case is substantial: (Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] , SCR pp. 557-58) "The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law." 22. In Dy. Commr. v. Rama Krishna Narain [1954 SCR 506 : AIR 1953 SC 521] also it was held that a question of law of importance to the parties was a substantial question of law entitling the appellant to a certificate under (the then) Section 100 CPC. 23. To be substantial a question of law must be....