1999 (6) TMI 16

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.... V. MARUTHI J.---The following question is referred by the Income-tax Appellate Tribunal, Hyderabad, under section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that an amount of Rs. 1,00,000 paid to Shri A. Rami Reddy, the retiring partner, for relinquishing his 2/....

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....ership and my intention having been conveyed to all of you orally and all of you having agreed to release me from the partnership from this day, I hereby relinquish my 2/16ths share, interest and title in the schedule mentioned properties and in the assets and liabilities including hypothecation to bank or in the bank guarantees, good-will, etc., in favour of all of you for a consideration of Rs. ....

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....e incurred by the assessee is a revenue expenditure. In support of their finding, they relied on clause 11 of the partnership deed (extracted above) and also observations made in CIT v. Puran Das Ranchodas and Sons [1988] 169 ITR 480 (AP). Hence, the Revenue is before us. To consider whether expenditure incurred by the assessee under the said circumstances mentioned above is revenue or capital ....