COMMISSIONER OF INCOME TAX Vs. VIJAYALAKSHMI METAL INDUSTRIES

JUDGEMENT

(1.) THE Revenue seeks to levy capital gains tax on a transfer which had admittedly not taken place. It relies on the fact that the firm which consisted of two partners stood dissolved by the death of one of them on March 3, 1989. THEre was no evidence to show that after such dissolution, the property which had belonged to the firm was transferred either to the surviving partner or to the legal heirs of the deceased partner. On the other hand what is found by the Tribunal is that even after the demise of one of the partners, the business continued and assessment continued to be made on the firm.

(2.) THE assessment year with which we are concerned is the year 1989-90. In that year there was a dissolution by operation of law by reason of Section 42(c) of the Partnership Act. That however was not followed by the transfer of capital assets by way of distribution of capital assets on the dissolution of the firm.