A.L.A. Firm vs Commissioner Of Income-Tax on 10 January, 1975
In the decision of the Madras High Court in A. L. A. Firms case (supra) it had been clearly held :
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1 - 8 of 8 (0.29 seconds)Malabar Fisheries Co, Calcutta vs Commissioner Of Income Tax, Kerala on 19 September, 1979
4. In the appeal against the assessment, the assessee contended before the Commissioner (Appeals) that the ITO was not correct in bringing to assessment unrealised profit on the value of closing stock of finished goods. He further contended that as per the decision of the Supreme Court in the case of Malabar Fisheries Co. v. CIT [1979] 120 ITR 49, there was no transfer when a dissolution took place between the partners and they shared the assets and liabilities of the partnership; thus when there was no transfer, no profit was assessable on the value of the closing stock transferred to any one of the partners as per the terms of the dissolution deed. In other words, it was contended before the Commissioner (A) that there was no transfer of closing stock or assets on the dissolution of the firm but only an adjustment of the rights deed. In his order, the Commissioner (A) referred to clause (1) of the retirement deed dt. 30-9-81, as per which Sri V. J. John agreed to pay each of the three retiring partners their respective share of capital as share of profit up to 30-9- 81 and share of goodwill in cash of Rs. 5,000 each and the retiring partners had agreed to release all their rights, interest and title over the partnership assets in favour of Sri V. J. John.
C.I.T., U.P vs Bankey Lal Vaidya (Dead) By L.R.S on 21 January, 1971
Thereafter, purporting to apply the ratio of the decision of the Supreme Court laid down in the case of CIT v. Bankey Lal Vaidya [1971] 79 ITR 594, the Commissioner (A) held that the transfer of closing stock to Mr. V. J. John, one of the partners, was nothing but a receipt of his share in the distributed assets of the firm and there was neither transfer nor sale generating any profits to be assessed. In the above view of the matter, he deleted the addition of Rs. 24,088.
G. R. Ramachari And Co. vs Commissioner Of Income-Tax, Madras. on 8 September, 1960
5. The learned Departmental Representative vehemently and forcefully contended before us that the Commissioner (A) erred in deleting the addition made by revaluing the closing stock at market rates on the dissolution of the firm. He further contended that the Commissioner (A) failed to note that what was done by the ITO was in accordance with the decision of the Madras High Court in the cases of G. R. Ramachari & Co. v. CIT [1961] 41 ITR 142 and A. L. A. Firms case (supra).
Popular Workshops vs Commissioner Of Income-Tax on 19 December, 1985
In the present case, three of the four partners had retired and the fourth partner had taken over the assets and liabilities of the firm. Thus there was a clear case of dissolution of the assessee-firm and in these circumstances the decision of the Madras High Court would squarely apply to the assessees case and the ITO was justified in re-valuing the closing stock of finished goods as on 30-9-81 at market rate and bringing to assessment the difference between the book value and market value. Actually the above view of the Madras High Court had the tacit support of Supreme Court in Sunil Siddharthbhais case (supra) as was pointed out by the Kerala High Court in the case of Popular Workshops (supra). Hence, in the light of the decision of the Madras High Court referred to earlier, the other contentions raised by the assessees representative have to be rejected. The feeble attempt made by the assessees representative that the stock of finished goods as on 30-9-81 had already been valued at market rate and on that basis only adjustment of accounts between the partners took place is a new case made out for the first time before us and is not supported by the terms and conditions of the retirement deed dt. 30-9-81 or any other material and further there was no whisper of any such argument at any stage either before the ITO or before the Commissioner (A). Hence this argument is not entertained. In commissioner (A) and restore the order of the ITO bringing to assessment a sum of Rs. 24,088 by valuing the stock of finished goods as on 30-9-81 at market rate.
Shri Sunil Siddharthbhai Etc vs Commissioner Of Income Tax, Ahmedabad ... on 27 September, 1985
In the present case, three of the four partners had retired and the fourth partner had taken over the assets and liabilities of the firm. Thus there was a clear case of dissolution of the assessee-firm and in these circumstances the decision of the Madras High Court would squarely apply to the assessees case and the ITO was justified in re-valuing the closing stock of finished goods as on 30-9-81 at market rate and bringing to assessment the difference between the book value and market value. Actually the above view of the Madras High Court had the tacit support of Supreme Court in Sunil Siddharthbhais case (supra) as was pointed out by the Kerala High Court in the case of Popular Workshops (supra). Hence, in the light of the decision of the Madras High Court referred to earlier, the other contentions raised by the assessees representative have to be rejected. The feeble attempt made by the assessees representative that the stock of finished goods as on 30-9-81 had already been valued at market rate and on that basis only adjustment of accounts between the partners took place is a new case made out for the first time before us and is not supported by the terms and conditions of the retirement deed dt. 30-9-81 or any other material and further there was no whisper of any such argument at any stage either before the ITO or before the Commissioner (A). Hence this argument is not entertained. In commissioner (A) and restore the order of the ITO bringing to assessment a sum of Rs. 24,088 by valuing the stock of finished goods as on 30-9-81 at market rate.
Section 189 in The Income Tax Act, 1961 [Entire Act]
K.P. Yeriswamy And Sons vs Income-Tax Officer on 24 March, 1984
Reference was also made to the decision of ITAT, Hyderabad in the case of K. P. Yeriswamy & Sons v. ITO [1984] 9 ITD 372.
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