D.V. Shylendra Kumar, J.

This is an appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, 'the Act') directed against the order of the Income-Tax Appellate Tribunal, Bangalore in ITA 581/Bang/2002 rendered on 1-10-2003.

2. The appeal had been admitted for examination on the following questions of law:

1. Whether the Colorable device adopted by the assessee in admitting two new partners namely Sri. M. Venkataramaiah and Smt. Sujatha Venkataramaiah and permitting all the old partners to retire from the firm by receiving a consideration amount of Rs.16,55,647/-from the old partners would amount to a transfer attracting the capital gains provision as per the Income Tax Act.?

2. Whether the Tribunal was correct in relying on various judgments of the Apex Court and other Courts in arriving at the conclusion that there was no Transfer on receipt of consideration amount by the retiring partners from the incoming partners without examining and applying the amended provisions of Section 45 of the Act.?

3.1. The brief facts leading to the above appeal are as under: Assessee is a partnership firm and the relevant assessment year is 1995-96. The firm was ca