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M. R. SHAH, M. M. SUNDRESH
Commissioner of Income Tax -23 – Appellant
Versus
Mansukh Dyeing and Printing Mills – Respondent
JUDGMENT :
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 24.06.2013 passed by the High Court of Bombay passed in Income Tax Appeal No. 1074 of 2009 (relating to A.Y. 1993-1994) and the judgment and order dated 24.06.2013 passed in Income Tax Appeal No. 1174 of 2009 (relating to A.Y. 1994-1995) by which with respect to the same assessee – M/s. Mansukh Dyeing and Printing Mills, a partnership firm, the High Court has dismissed the said appeals and has confirmed the respective orders passed by the Income Tax Appellate Tribunal (hereinafter referred to as “ITAT”) deleting the short term capital gains addition made by the Assessing Officer (AO), the Revenue has preferred the present appeals.
2. The facts leading to the present appeals in nutshell are as under :-
2.1 The respondent assessee, a partnership firm originally consisted of four partners (all brothers) engaged in the business of Dyeing and Printing, Processing, Manufacturing and Trading in Clothing. Under the Family Settlement dated 02.05.1991, the share of one of the existing partners – Shri M.H. Doshi having 25% profit share in the firm was reduced to 12% and, for his balance 13% s
Reassessment – Assets revalued and credit into capital accounts of respective partners can be said to be “transfer”.
Mere reduction in profit-sharing ratio of existing partners upon new partner's admission into firm, without retirement, does not constitute transfer u/s 2(47); amount credited from new contribution n....
Discounts given for prompt payment are legitimate business expenses and cannot be disallowed without corroborating evidence, particularly following a search where no incriminating materials were seiz....
The main legal point established is that the applicability of Section 45(3) of the Income Tax Act depends on whether the transfer is of a capital asset, and the revaluation of assets must be justifie....
The court established that amounts received by a retiring partner as settlement of their share do not constitute a taxable transfer of capital assets under the Income Tax Act.
Point of Law : Consideration, which a partner acquires on making over a personal asset to the firm as his contribution to its capital cannot fall within the terms of Section 48 and as that provision ....
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