The Commissioner of Income Tax-Ill, Pune vs Mr. Riyaz A. Sheikh

In this appeal by the revenue for the assessment year 2002-03, though three questions of law are raised, at the time of hearing, counsel for the revenue presses only one question, which reads as under:-

Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in reversing the decision of CIT(A) and deleting the addition of Rs. 66,20,005/- made by the assessing officer towards long term capital gain on transfer of goodwill ?

We find that by the impugned order, the Tribunal while holding that amounts received by a partner on his retirement from partnership firm are exempt from capital gains tax relied upon the decision of this Court in the matter of Prashant S. Joshi Vs. The Income Tax Officer and Union of India (UOI), . Counsel for the revenue is unable to point out as to how the decision in the matter of Prashant S. Joshi (supra) inter alia holding that no capital gains are payable by an erstwhile partner on amounts received on retirement would not be applicable to the present case. The only submission on behalf of the revenue is that there was an earlier decision of this Court in the matter of N.A. Mody Vs. Commissioner of Income Tax, and it has not been considered in the decision rendered in the matter of Prashant S. Johsi (supra).

In the impugned order, the Tribunal does refer to the decision of this Court in the matter of N.A. Mody (supra) and states that it follows the decision of this Court in the matter of Commissioner of Income Tax, Bombay City-III, Bombay Vs. Tribhuvandas G. Patel, and the same has been reversed by the Apex Court in Tribhuvan Das G. Patel Vs. Commr. of Income Tax, Bombay, . This Court in the matter of Prashant S. Joshi (supra) has also referred to the decision of Tribuvandas G. Patel (supra) rendered by this Court and its reversal by the Apex Court. Moreover, the decision of this Court in the case of Prashant S. Joshi (supra) placed reliance upon the decision of the Supreme Court in the case of Commissioner of Income Tax Vs. R. Lingmallu Raghukumar, wherein it has been held that amounts received on retirement by a partner is not subject to capital gains tax. In the above circumstances we see no reason to entertain the proposed question of law Accordingly, the appeal is dismissed with no order as to costs.