COMMISSIONER OF INCOME TAX Vs. HANSALAYA PROPERTIES

JUDGEMENT

(1.) FOR the assessment years 1982 -83 to 1986 -87, the Revenue seeks a mandamus to the Tribunal for drawing up a statement ofcase and referring the following questions of law for the opinion of the High Court :

(2.) ON March 19, 1979, there was a change in the constitution of the firm. The then existing firm was dissolved. Hotel Home Pvt. Ltd., one of the partners of the then firm, disassociated itself and the remaining partners constituted a new firm. A deed of dissolution (of the old firm) and a deed of partnership (for the new firm), were executed on the same day. Various assets and liabilities of the erstwhile firm were revalued for the purpose of distribution amongst the partners. The multi -storeyed building was valued at a price mutually agreed upon by the partners inter se. What was distributed to the partners was ploughed back as capital of the partners contributed in the new firm at the same valuation at which it wasdistributed in the final accounts of the previous firm. Incidentally, it may be noted that till March 17, 1979, stock -in -trade was valued by the then firm as per book value, i.e., the actual cost of land plus the total amount spent on construction. The valuation agreed upon between the partners by mutual consent was at variance with the figure of book value.

(3.) THE assessed went in appeal before the Commissioner of Income -tax (Appeals) who held that the value shown in the books of account in the existing firm should be taken as the value and not the written down value of the assets shown in the old firm.