Commissioner of Income Tax vs Ramanbhai B Amin.

B.K. Mehta, J.—At the instance of the Commissioner of Income Tax, Gujarat, the following question is referred to us for our opinion :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the contribution of joint stock made by the assessee as capital to the firm, M/s. Niraru Associates, did not within the meaning of section 2(47) tantamount to transfer in relation to the said joint stock and that, therefore, there arose no profits and gains computable under the head ''Capital gains'' ?"

For the reasons stated in the judgment and order of the Division Bench of this court in Income Tax Reference No. 34 of 1980 - Commissioner of Income Tax, Gujarat-I Vs. Kartikey V. Sarabhai, , we must answer the question referred to us in this reference at the instance of the Commissioner in the negative, i.e., in favour of the Revenue and against the assessee with no order as to costs.

On behalf of the assessee, an oral application has been made for a certificate of fitness for appeal to the Supreme Court. We are of the opinion that since a consensus has been reached between the assessee and the Revenue to abide by the decision of the Supreme Court in appeal preferred by Kartikey V. Sarbhai from the aforesaid decision of this court, being Civil Appeal No. 1777 of 1981 ( Sunil Siddharthbhai Vs. Commissioner of Income Tax, Ahmedabad, Gujarat, it may be necessary to grant leave to appeal, which, however, is not pressed for by the present assessee, in view of the consensus. Oral application, therefore, stands disposed of accordingly. The consensus is that the parties will abide by the decision of the Supreme Court in the aforesaid appeal and will not object to the Tribunal adjusting its order u/s 260(1) of the Income Tax Act, 1961, in the light of the decision of the Supreme Court, and the Revenue shall not enforce the demand till the Tribunal adjusts according to the decision of the Supreme Court. Liberty reserved in case of difficulty.