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2020 (2) TMI 564
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....ised by the assessee was not pressed before us. Accordingly, the entire appeal of the assessee is dismissed as withdrawn / not pressed, as the case may be. Hence, we proceed to adjudicate the grounds raised by the revenue in its appeal for the A.Y.2010-11. 2.1. The revenue has raised the following grounds in its appeal:- "1.1 "On the facts and in the circumstances of the case and in law , the Ld.CIT(A) erred in deleting of Rs. 6,72,30,150/-assessed as capital gain. 1.2 "On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the decision of the Hon'ble ITAT in the case of Sudhakar Shetty (130ITD197(Mum) and thereby treating the amount of Rs. 10,48,51,708/- as capital receipt not chargeable to tax u/s.45. 2.1 "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the deduction of Rs. 10,45,51,708/-while computation of book profit U/S.115JB. 3. The appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of appeal. 4. The appellant prays that the order of CIT(A) on the....
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.... of Income Tax (Appeals) 5. Aggrieved by the said order, the assessee preferred an appeal before the Hon'ble Commissioner of Income Tax (Appeals) which was disposed off by the ld. CIT(A) vide order dated 28/02/2014 wherein it was held that:- • Revaluation reserve does not come under purview of Section 10(2A) and upheld the ld AO's order on the same; • Deleted leviability of capital gains by relying on various judicial precedents and the decision of CIT vs Riyaz A. Sheikh (2014) 41 taxmann.com 455/221 Taxman 118 (Mag) (Bom.) which overruled the decision in the case of Sudhakar M Shetty (supra); • Deleted the addition made by the ld AO under MAT provisions as pure capital receipt is not taxable under MAT. Proceedings before Income Tax Appellate Tribunal 6. Aggrieved by the order of the ld. CIT(A), the grounds raised by the revenue were disposed off by this Tribunal vide order dated 01/06/2018 wherein it was held that:- • Amount received by the assessee from the partnership firm in the current year could not be related with the revaluation done in the past; • Amount that was received by the Appellant upon re....
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....y manner disputed, the question of applicability of the judgments of the Supreme Court would arise. The applicability of the decision of the Gujarat High Court in case of CIT Vs. Mohanbhai Pamabhai,[ 91 ITR 393 (Guj)] as confirmed by the Supreme Court in case of CIT Vs. Mohanbhai Pamabhai [165 ITR 166 (SC)], the decision of the Supreme Court in case of Sunil Siddharthbhai Vs. CIT [156 ITR 509 (SC)], as also the decision of the Supreme Court in case of CIT Vs. R. Lingmallu Raghukumar [247 ITR 801 (SC)] would have to be examined. Since this has not been done at the level of the Tribunal, we are of the opinion that it would be a better option that the Tribunal at first instance undertakes such exercise. Only on this around, the impugned judgment of the Tribunal is set aside. The Tribunal is requested to decide the appeals afresh on merits after considering the contentions of both sides. ..." (emphasis supplied) 8.1 Hence, the present proceedings had emanated pursuant to the directions of the Hon'ble High Court restoring the matter to the file of this Tribunal for fresh adjudication as stated supra. 9. We have heard rival submissions and perused the materials available on reco....
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....s of the assessee. 11. Decision of Hon'ble Gujarat High Court in the case of CIT vs. Mohanbhai Pamabhai reported in 91 ITR 393 (Guj) which has been approved by Hon'ble Supreme Court in the same case reported in 165 ITR 166(SC):- In the aforesaid case, the taxability of amount received by retiring partner of retirement from the firm was subject matter of adjudication. The Court held that when the partner retires from the firm, there is no transfer of interest to the existing partners by the retiring partner and it is not a transfer u/s 2(47) of the Act. Further, the Hon'ble Gujarat HC held that capital gains should not be levied on any amount paid to the partners for their net partnership assets and goodwill. We find reliance was also placed on the earlier decision of Hon'ble Supreme Court in the case of Tribhuvandas G. Patel vs. CIT reported in 236 ITR 515 (SC) wherein the Hon'ble Supreme Court over ruled the decision of Hon'ble Bombay High Court in the same case reported in 115 ITR 95(Bom). 11.1. Decision of Hon'ble Supreme Court in the case of Sunil Siddharthbhai vs. CIT reported in 156 ITR 509(SC) The Hon'ble Supreme Court in the said case was considering the que....
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....above legal discussion, we hold that the amount received by assessee on retirement from partnership firm is not taxable under the head 'capital gains'. The Assessing Officer is directed accordingly." 12.1. As could be seen from the above, the decision rendered by this Tribunal in the case of Shri Sudhakar Shetty was reversed by the decision of Ms. Hemalata S Shetty (wife of Shri Sudhakar Shetty) by following the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Riyaz A Sheikh reported in 41 Taxmann.com 455(Bom). 12.2. We also find further that the decision rendered by this Tribunal in the case of Ms. Hemalata Shetty supra has been subsequently upheld by the Hon'ble Jurisdictional High Court in ITA No.1755 of 2016 dated 05/03/2019 wherein it was held that the amount received by a partner on retirement is not subject to tax in the hands of retiring partner in view of Section 45(4) of the Act and liability, if any, to pay the tax is of the partnership firm. 12.3. We also find that the Co-ordinate Bench of this Tribunal in the case of DCIT vs. Thakur Estate in ITA No.4651/Mum/2016 and CO No.311/Mum/2017 dated 09/05/2019 and also in the case of ITO vs....
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....s proposition. We find that in the said decision, the order of Assessing Officer was upheld and capital gain tax was levied on the excess amount paid over and above the amount standing to the credit of the capital account of the partner. We find that in the instant case also the firm i.e. Pranik Landmark Associates had only paid the amounts lying to the credit of the partner i.e. the assessee and had not paid even a penny more than the amount lying in the credit of the partner's current account. Hence, the reliance placed by the ld. DR on the decision of Bangalore Tribunal actually supports the case of the assessee herein. 12.7. In view of the aforesaid observations and respectfully following the various judicial precedents, relied upon hereinabove, the ground Nos.1.1 and 1.2 raised by the revenue are dismissed. 13. The ground No.2.1 raised by the revenue is challenging the action of the ld. CIT(A) wherein the sum of Rs. 10,48,51,708/- being the share of profit from the partnership firm was sought to be excluded while computing the book profits u/s.115JB of the Act by treating it as capital receipt. 13.1. We have heard rival submissions and perused the materials available ....
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....0/03/2019 had held as under:- "20. ...In the case of lndo Rama Synthetics (I) Ltd. V/s. CIT, 330 ITR 363(SC) the Hon'ble Apex Court has held that the object of MAT provisions is to bring out the real profit of the companies. The thrust is to find out the real working results ot the company. Inclusion of receipt in the computation of MAT would defeat two fundamental principles, it would levy tax on receipt which is not in the nature of income at all and secondly it would not result in arriving at real working results of the company. The real working result can be arrived at only after excluding this receipt which has been credited to P&L a/c and not otherwise. The case of the assessee is supported by the following decisions: * In the case of Shivalik Venture Pvt. Ltd. V/s. Dy. CIT, 43 ITR(Mum Trib) 187 * In the case of DCIT Circle-1 V/s. McNally Bharat Engineering Co. Ltd., ITA No.100/Kol/2011, Dated 01/03/2017(Kol Trib). *In the case of ACIT, Range-2, V/s. M/s. L. H. Sugar Factory Ltd., ITA NO.417 & 418/LKW/2013 (Lucknow Trib). * In the case of DCIT, c.c-XXVIII V/s. Binani Industries Ltd., 178 TTJ 658(Kol) * In the case of A....