Delhi Industries And Enterprises, New ... vs Assessee
Hon'ble Kerala
High Court in its latest decision rendered on 28.10.2010 in ITA No.474 of
1999 in the case of CIT Vs. Shri M.V. Narayanan has held that on retirement
of partner, if the firm, continues with the business then there is no
distribution of assets and section 45(4) of the Act would not be applicable.
Though the parties have not advanced any agreement but at the time of
decision, it struck to our mind, that true sense nothing was gained by the
firm. If some thing has been transferred and any gain is there, then that
would be to erstwhile partner. In the case Smt. Paru D. Dave, after the order
of the Learned CIT(Appeals) in the case of firm, assessment of retired
partner was reopened. It gives an indication that real beneficiary of gain, if
any, then it is the erstwhile partner. Since parties have not advanced any
argument on this aspect, therefore, we do not wish to make any finding. We
allow this ground of appeal raised by the assessee and held that no capital
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gain tax would be imposeable upon it on account of alleged allegation of
distribution of assets.