TaxTMI 
TaxTMI 
2018 (12) TMI 466
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....ad purchased the same under a separate Sale Deed in the year 1973. They constituted a partnership in the name of M/S.Srinivasa Enterprises along with 12 others in terms of the Partnership Deed dated 26.11.1976. A Theatre by name "Gopal Theatre" was constructed in the premises in question. Sri.N.A.Venugopal and N.A.Ravigopal retired from the partnership with effect from 6.6.1978. The partnership firm continued. It was reconstituted on several occasions. In the year 2001, four partners remained. The Theatre and the land were sold to one Sri T.Prasanna Kumar by virtue of two separate registered sale deeds on 14.2.2001 by the partners as well as the erstwhile partners of the firm. The firm was also dissolved on the same day in terms of the D....
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....l filed by the partners before the Income Tax Appellate Tribunal was also rejected. Hence, this appeal. 3. By the order dated 17.3.2010, the appeal was admitted to consider the following substantial questions of law: i) Whether, on the facts and circumstances of the case, the Tribunal is right in holding that the firm, M/s.Srinivasa Enterprises, was the owner of the capital asset viz. land and building comprised in Gopal theatre situated at Tank Road, Doddaballapur? ii) Whether on the facts and circumstances of the case, the Tribunal is right in holding that the provisions of Section 45(4) of the Income Tax Act, 1961 are applicable to the facts of the present case? iii) Whether on the facts and circumstances of the case, the Tri....
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.... for the revenue. 6. Heard learned counsels. 7. The contention of the assessee is that the erstwhile partners namely Venugopal and Ravigopal were the only owners of the land and therefore the income that is assessed in the name of the firm, requires to be deleted. However, the material on record would indicate that both of them had furnished a joint letter dated 28.11.2006 wherein they stated that they had contributed their share as capital towards the partnership firm, running Gopal Theatre along with land and building. Therefore, the partnership firm, namely, M/S.Srinivasa Enterprises has become the absolute owner since that date, namely, 26.11.1976. Venugopal and Ravigopal have retired from the partnership firm with effect from 6.6....
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....y because they have stated in the sale deed that they have relinquished their right does not pre-suppose that any right existed in them as on that date. The partners could relinquish only which they possess. The sale deed was executed on 14.2.2001. The partners retired on 6.6.1978. Therefore, they had no right at all which they could relinquish. Therefore, in the absence of possessing any legal right, the question of relinquishment does not arise for consideration. Therefore, such a contention cannot be accepted. 11. It is also indicated at page No.10 of the deed that, the so called settlement was arrived at in view of the pending suit. It is pleaded that a suit in O.S.No.210 of 1992 was filed before the Court of Additional Munsiff, (Jr.....