[aaykarbhavan] Fw: [IT Reporter] Handbook for Personnel Officers 2013

CIT vs. Riyaz A. Sheikh (Bombay High Court)

Amount received by partner on his retirement is not chargeable to tax as capital gains

The assessee, a partner in a firm, received Rs. 66 lakhs over and above his capital contribution on his retirement from the firm. The assessee claimed that the said sum was a capital receipt not chargeable to tax. However, the AO held that the retirement had resulted in a relinquishment of his pre-existing rights in the partnership firm and, therefore, the same was in the nature of capital gain on transfer of goodwill and liable to tax under s. 45 read with s. 2(47)(i) & (ii) of the Act. The CIT(A) and Tribunal (order not available but operative portion is reproduced in Rajnish M Bhandari, attached) reversed the AO on the ground that when a partner retires from the firm and receives his share of an amount calculated on the value of the net partnership assets including goodwill of the firm, there is no transfer of interest of the partner in the goodwill, and no part of the amount received is assessable as capital gain u/s 45 of the Act. It was also held that the decision of the Bombay High Court in Tribhuvandas G Patil 115 ITR 95 followed in N A Mody 162 ITR 420 has been reversed by the Supreme Court inTribhuvandas G Patel 236 ITR 515 (SC) and that this legal position had been noted in Prashant S Joshi 324 ITR 154 (Bom). On appeal by the department to the High Court HELD dismissing the appeal:

The Tribunal has correctly referred to the fact that N.A. Mody 162 ITR 420 (Bom) followed Tribhuvandas G. Patel 115 ITR 95 and that the same has been reversed by the Apex Court in Tribhuvandas G. Patel 263 ITR 515. This Court in Prashant S. Joshi 324 ITR 154 (Bom) has also referred to the decision of Tribuvandas G. Patelrendered by this Court and its reversal by the Apex Court. Moreover, the decision of this Court in Prashant S. Joshi placed reliance upon the decision of the Supreme Court in CIT v/s. R. Lingamallu Rajkumar 247 ITR 801 wherein it has been held that amounts received on retirement by a partner is not subject to capital gains tax

On Thursday, 28 November 2013 10:47 AM, Pavan Singla <singlapavan@gmail.com> wrote:

 

[Attachment(s) from Pavan Singla included below]

Handbook for Personnel Officers 2013 

TIOL-DDT 2240 
28.11.2013 
Thursday

DOPT has brought out a wonderful guide - Handbook for Personnel Officers 2013 – which would be of immense use to administrators and employees of the Central Government. Every aspect of an employee's career with the relevant rules and instructions are chronicled in an easy and simple manner.

This is a must book for all Government employees.

Some samples from the book:

5.11.9 Claims through Marriage: No person who was not a member of Scheduled Caste or a Scheduled Tribe or Other Backward Class by birth will be deemed to be a member of Scheduled Caste or Scheduled Tribe or Other Backward Class merely because he or she had married a person belonging to a Scheduled Caste or Scheduled Tribe or Other Backward Class. On the other hand a person who is a member of a Scheduled Caste or a Scheduled Tribe or an OBC would continue to be a member of that Scheduled Caste, Scheduled Tribe or OBC, as the case may be, even after his or her marriage with a person who does not belong to a Scheduled Caste or a Scheduled Tribe or an Other Backward Class.

5.11.10 Cases of Conversion and Reconversion: Scheduled Caste person getting converted to a religion other than Hinduism, Sikhism or Buddhism would cease to be a member of Scheduled Caste. However, if he reconverts himself to his original religion he will be deemed to have reverted to original caste if accepted by the members of that particular caste as one of them.

31.1.3 Posting of Husband and Wife at the same Station: When both spouses are in same Central Service or working in same Department and if posts are available, they may mandatorily be posted at the same Station.

30.4. Joining Time : One day joining time is admissible to join a new post within the same station or which does not involve a change of residence.

51.1.2 prior sanction of central government necessary for accepting commercial employment : A pensioner, who immediately before his retirement was a member of Central Service Group 'A' is required to obtain previous sanction of the Central Government for accepting commercial employment before the expiry of one year from the date of his retirement from service.

51.3 consequences of not obtaining prior sanction : If a pensioner takes up commercial employment without the prior permission of the Central Government or commits a breach of any conditions subject to which permission has been granted to him to take up the employment, the Central Government is competent to withhold or withdraw pension whether partly or in full for such period as may be specified in the order.

--
Regards,

Pawan Singla

BA (Hon's), LLB

Audit Officer

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