TaxTMI 
TaxTMI 
1998 (7) TMI 32
X X X X Extracts X X X X
X X X X Extracts X X X X
....uestions have been referred to us at the instance of the Revenue which relate to the assessment year 1973-74. The questions referred are the following: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that there has been a dissolution of the partnership on February 29, 1972, and not a mere retirement of partner, Sri S. Manickam? ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8] 68 ITR 240, in so far as the first question is concerned and the decision of the Supreme Court in the case of Addl. CIT v. Mohanbhai Pamabhai [1987] 165 ITR 166, in so far as the second question is concerned. The apex court has held that the adjustment of mutual rights on dissolution of a partnership firm does not result in a sale of the firm's assets by the firm to the erstwhile partner and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sport. It was contended by the counsel for the Revenue that as the said Manickam was not entitled to receive any money at the time of dissolution, but in fact was required to pay some amount to the firm, the allotment of the buses as and by way of adjustment of his rights in the firm was not a genuine adjustment, but, was only a camouflage for cutting off the links with him. The argument so rai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aving to pay Rs.1.35 lakhs would not have arisen at all." The liability of Manickam to pay a sum of Rs.1,35,000 as noted by the Tribunal was a liability which arose, only after he took over the assets in addition to the buses allotted to him and the value of the assets so taken over were found to be in excess of what he was entitled to and, therefore, the debit of Rs.1,35,000. That the buses....