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1 - 7 of 7 (0.20 seconds)Commissioner Of Income-Tax vs Bhurangya Coal Co. on 23 September, 1958
" Even though the property was treated as an asset of the firm, Sri Kedar Nath Poddar was also the owner thereof. All the partners of the firm jointly owned all the assets of the firm. When a dissolution takes place or
when a partner retires, then the account is made up to ascertain the share of each partner in the then existing assets of the firm and each partner gets back what he owned jointly with the other partners. The Income-tax Officer as well as the Appellate Assistant Commissioner have proceeded on the footing that the entries made in the books of the firm amounted to a transfer or relinquishment of the rights over the property under consideration which, we think, is not correct. It is well-settled, as has been pointed out in the case of CIT v. Bhurangya Coal Co. , that rights in immovable property are neither created nor extinguished merely by adjustment entries in the account books. The law requires certain formalities before the title to an immovable property can pass from one person to another. Until such formalities are completed, there can be no transfer or extinguishment or relinquishment of the rights in immovable properties. Thus, in the instant case, we find that, in the eye of law, Sri Kedar Nath Poddar was all along the owner and there was no legal transfer of the property in question when he allowed the same to be treated as the asset of the firm. Nor was there any legal transfer when he took away the property out of the assets of the firm. Hence, we are of the opinion that the facts of the instant case did not amount to a transfer within the meaning of Section 2(47) of the Act, and, therefore, it did not attract 'capital gains' tax under Section 45 of the Act."
Section 47 in The Income Tax Act, 1961 [Entire Act]
Commissioner Of Income-Tax vs Dadha And Company on 29 July, 1982
13. This has also been the view taken by the Madras High Court in CIT v. Dadha and Co. . We can draw indirect support from the view of the Madras High Court which held that the partners on behalf of the firm cannot divide an immovable property among themselves in the absence of a registered conveyance.
Addanki Narayanappa & Anr vs Bhaskara Krishtappa And 13 Ors on 21 January, 1966
16. We do not, however, agree with the Tribunal that the firm was at no time the legal owner of the immovable property and had no power to transfer. Following the principle laid down by the Supreme Court in Addanki Narayanappa v. Bhaskara Krishnappa, , we hold that the partner by bringing the property into the common stock of the firm invested the firm with the ownership of the property. But it had not effected any transfer of the property by releasing the property in favour of a partner inasmuch as the transfer was not accompanied by a registered deed of conveyance. Nor is it a release in settlement of accounts on dissolution. Accordingly, we answer question No. 1 in the negative and question No. 2 in the affirmative.
Section 256 in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
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