2009 (2) TMI 93

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....also balancing charge under section 41(2) was not imposable?" 2. The Assessment Year in question is 1984-1985, the relevant previous year being calendar year 1983. The Assessee trust became a partner in a partnership firm constituted on 16/1/1982, whereby the Assessee was having 60 % share and the remaining 40 % share was held equally at 20% each by two other persons, namely S.K. Patel Family Trust and Nirma Chemical Works Pvt. Ltd. With effect from 1/1/1983, by virtue of Retirement Deed dated 5/1/1983, Nirma Chemical Works Pvt. Ltd., retired and on settlement of accounts, as mutually agreed, land with superstructure valued at Rs.11,06,555/- was given to the retiring parter. Thereafter, on 31/3/1983 the firm was dissolved and S.K. Patel ....

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....sing Officer and hence the said addition was also deleted. 5. The Revenue challenged the order of Commissioner (Appeals) before Tribunal, who vide impugned order has confirmed the findings of Commissioner (Appeals) by referring to the Apex Court decision on which reliance has been placed by Commissioner (Appeals). The findings in relation to balancing charge have also been confirmed by the Tribunal. 6.Learned counsel appearing for appellant Revenue has assailed the impugned order of Tribunal by submitting that, both, Commissioner (Appeals) and the Tribunal failed to appreciate that the entire act of formation of partnership firm, thereafter retirement of one partner and subsequent dissolution were all sham transactions, in as much as,....

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..... Shivkami Co. P. Ltd. (supra) the Apex Court was dealing with the first proviso to Section 12B(2) of the Indian Income Tax Act, 1922, corresponding to section 52 of the Act. After referring to the earlier decision in case of K.P. Varghese Vs. ITO (1981) 131 ITR 597, the Apex Court has stated that:- "......... Though the legislation in question is to remedy the social evil and should be read broadly and should be so read that the object is fulfilled, yet the onus of establishing a condition of taxability must be fulfilled by the Revenue. There is no evidence direct or inferential that the consideration actually received by the assessee was more than what was disclosed or declared by him. The relationship between the parties has been esta....

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.... inferential, in these cases that the full consideration had not been stated in the document." 9. Thus, on facts, as concurrently found by both the appellate authorities, namely Commissioner (Appeals) and the Tribunal, there is no evidence to show that the Assessee received anything more than what is stated in the document. Applying the aforesaid settled legal position to the facts of the case, it is not possible to state that the impugned order of Tribunal suffers from any legal infirmity, so as to warrant interference. 10. In so far as Madras High Court decision in case of S.V. Kumaragurupasamy Vs. CIT (2003) 260 ITR 127 cited on behalf of Revenue, suffice it to state that the said judgment has not considered the Apex Court decision....