| Case ID |
16a2637e-eb93-41a7-9d2c-19cf249d6591 |
| Body |
View case body. Login to View |
| Case Number |
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| Decision Date |
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| Hearing Date |
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| Decision |
The court held that whether it was a case of dissolution of the partnership or a retirement, the assessee was entitled only to the assets derived from the partnership firm and not to the excess amount received. This excess amount was subject to assessment under capital gains tax. The distinction between retirement and dissolution was emphasized, noting that the consequences of each are different under the Income-tax Act. The court clarified the legal implications of the payment received by the partner upon his exit from the firm, affirming that any excess amount over the share in the partnership would be considered capital gains. |
| Summary |
This case revolves around the assessment of capital gains tax following the retirement of a partner from a partnership firm. The key legal issues included whether the excess amount received by the outgoing partner constituted taxable income under the Income-tax Act, 1961, specifically under section 47(ii) and section 2(47). The court's judgment clarified the legal ramifications of partner retirement versus firm dissolution, emphasizing that any excess payment received by the retiring partner would be subject to capital gains tax. This case is significant for understanding the tax implications for partners exiting partnerships, which is a common issue in partnership law. Keywords related to this case include 'capital gains tax', 'Income-tax Act', 'partner retirement', 'firm dissolution', and 'tax implications'. |
| Court |
Delhi High Court
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| Entities Involved |
Not available
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| Judges |
S.B. Sinha, C.J.,
A.K. Sikri, J.
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| Lawyers |
Salil Aggarwal,
R.C. Pandey,
Ajay Jha
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| Petitioners |
Bishan Lal Kanodia
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| Respondents |
Commissioner of Income Tax
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| Citations |
2002 SLD 2796 = (2002) 257 ITR 449
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| Other Citations |
CIT v. Tribhuvandas G. Patel [1978] 115 ITR 95 (Bom.),
Eskayef Ltd. v. ITO [1986] 160 ITR 164/ 24 Taxman 616 (Kar.),
Tribhuvandas G. Patel v. CIT [1999] 236 ITR 515 (SC),
Sunil Siddharthbhai v. CIT [1985] 156 ITR 509/23 Taxman 14W (SC),
CIT v. Mohanbhai Pamabhai [1973] 91 ITR 393 (Guj.),
Addanki Narayanappa v. Bhaskara Krishnappa AIR 1966 SC 1300
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| Laws Involved |
Income-tax Act, 1961
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| Sections |
47,
2(47)
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