TaxTMI 
TaxTMI 
1980 (10) TMI 84
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....rred an appeal to the AAC. Before the AAC, reliance was placed on two decisions of the IT Appl. Tribunal. The AAC held that there was no transfer within the meaning of s. 45 r/w s. 2(47) of the IT Act. 4. On behalf of the Department, reliance was placed on the decision of the Appl. Tribunal in ITA No. 72/Ahd/79 dt. 16th June 1980. If this had been the only decision of the Appl. Tribunal, we would have followed it though with reluctance. The decision was taken inspite of the fact that prior thereto consistent view was taken in a number of matters in similar circumstances. The reasoning for taking the contrary view may be different but the decisions were all through in favour of the assessee. In CIT vs. L.G. Rammurthy 1977 CTR (Mad) 416 : (1977) 110 ITR 453, the Madras High Court emphasised that if a Bench of Tribunal on the identical facts came to a conclusion directly opposed to the conclusion reached by another Bench of the Tribunal on an earlier occasion that would be destructive of the institutional integrity itself. 5. This would have been a case for the constitution of larger Bench if the decision in ITA No. 72/Ahd/79 had been taken in ignorance of the fact that the Trib....
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....its own in the partnership assets but the partners jointly or in common owned the assets of the partnership. In CIT vs. Hind Construction Ltd. (1972) 83 ITR 211 (SC), the assessee received machinery valued at Rs. 2,06,372 and transferred it at the book value of Rs. 6,06,372 to the new firm in which the assessee was a partner. The firm credited the capital account of the assessee with Rs. 6,06,372 and debited the machinery account with an equal amount. The Tribunal in that case held that there could be no element of transfer or sale involved in a transaction between one's ownself. The tribunal observed that the value of the machinery had not been written off in the books of the firm but the assessee contributed it as their capital in the partnership firm at an appreciated price. On these facts, the following question was referred to the High Court: "Whether, on the facts and in the circumstances of the case, the tribunal was justified in deleting the sum of Rs. 4 lakhs from the total income of the assessee?" The Calcutta High Court answered the question in the affirmative. The Commr. Appealed to the Supreme Court. One appeal was filed by special leave and the other appeal was ....
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....rary intention in the subject matter or context, the words "any rights" must include all rights, and, therefore, where a capital asset is incorporeal property consisting of nothing but a bundle of rights and all such rights are extinguished, the words 'extinguishment' of any rights therein would be satisfied." This view was reiterated by the Gujarat High Court in CIT vs. Vania Silk Mills Pvt. Ltd. (1977) 107 ITR 300 (Guj). 10. In Malabar Fisheries Co. vs. CIT decided on September 19th 1979 120 ITR 49 (SC)to which we have referred in para 7, reliance was placed on behalf of the assessee on the decision of the Karnataka High Court in Addl. CIT vs. M.A.J. Vasnaik (1979) 116 ITR 110 (Kar). The observations of the Supreme Court at page 60 of the reports read as under: "Counsel for the Revenue referred us to decision of the Karnataka High Court in Addl. CIT vs. M.A. J. Vasnaik (1979) 116 ITR 110 (Kar), where that Court has taken the view that when individual assets are brought into a partnership so as to constitute the partnership property, there is a transfer of interest of the individual to the partnership and ss. 34(3)(b) and 155(5) of 1961 Act are attracted. In the first ins....
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...., while the firm as such is a separate and distinct until for purposes of assessment..... These provisions of the Act go to show that the technical view of the nature of partnership under English Law or Indian Law cannot be taken in applying the law of income-tax." 15. In the view of the Gujarat High Court, the aforesaid observations do not advance the case of the Revenue. It was held that the observations were obiter dicta and that they could not prevail against the ratio of later decisions. It was held that in subsequent decisions of the Supreme Court it is recognised that even for the purposes of IT Act a partnership is not a distinct person but a plurality of persons. The ratio of those decisions, in the view of the Gujarat High Court, is that even for the purposes of IT Act, the firm has no distinct legal entity apart from the partners constituting it. 16. On the assumption that the relevant observations made by the Supreme Court in A.W. Figgies and Co. & Ors. Constituting a part of the ratio decidendi are of general application, then also the Gujarat High Court was free to Act on its own opinion as to which is the more convincing and the Gujarat High Court preferred eve....