1989 (4) TMI 33

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....S. S. SODHI J.-The matter here concerns the transfer of immovable property by a firm to its partners, the controversy being whether such transfer can be effected by mere entries in the books of the firm ? The assessee, Bharati Engineering Corporation, owned three immovable properties described as a building near Paradise Cinema, Phagwara, Plot No. 32, Industrial Area, Phagwara, and a plot near ....

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....On appeal, the Commissioner of Income-tax deleted the additions made by the Income-tax Officer on account of both long-term and short-term capital gains by holding that the entries in the books of the assessee-firm did not have the effect of transferring the properties from the firm to its partners. The Tribunal agreed with this view and held that mere entries without conveyance of the properties ....

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....vided by the judgment of the High Court of Karnataka in Jansons v. CIT [1985] 154 ITR 432, where, the court further went on to hold that even an agreement entered into by the partners treating the firm's property as individual property would not have such effect, unless that agreement was followed by a deed of conveyance known to law. A similar view has been taken in string of authorities. Those c....