1995 (1) TMI 28

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.... Appellate Tribunal for the assessment year 1978-79, has been referred to this court : " Whether the Tribunal was right in holding that contribution of cut emeralds by the assessee in the partnership firm was transfer and liable to capital gains under section 45 read with section 2(47) of the Income-tax Act, 1961 ? " The relevant facts in brief are that the assessee has indicated in his retu....

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.... v. Hind Construction Ltd. [1972] 83 ITR 211. The claim of the assessee was allowed to the extent that it is a capital contribution, but the Income-tax Officer has treated the transfer under section 2(47) of the Income-tax Act, 1961, and charged capital gains tax. In appeal, the view taken by the Income-tax Officer has been confirmed by the Appellate Assistant Commissioner, vide its order dated Au....

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....on 2(47) of the Income-tax Act and answered it in the affirmative and held that the contribution of capital by a partner is a transfer and their Lordships further held that in that case, it is not taxable, it can be taxed only in a case where it is found that the firm is not genuine and a partner transferring his personal assets to the partnership firm does not represent a genuine intention to con....

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....tention specially to page 183 where a similar question was considered. It was found in that case that it was never the case of the Revenue that the contribution of capital was merely a device for reducing the tax and such a case was never put forward by the Revenue. Even there was no whisper of such a case where the Revenue assessed at any point of time and, therefore, there remains no occasion fo....