BALKRISHNA HIRALAL WANI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) Rule, by consent made returnable forthwith. Counsel for the respondents waives service. With the consent of counsel, the petition is taken up for final hearing.

(2.) The petitioner who is a partner in a firm of Solicitors retired on 20th October, 2003 on attaining the age of seventy years. Clause 33 of the Deed of partnership stipulates that all partners shall retire from the firm on reaching the age of seventy years. The Deed of partnership provides for three modes by which a person may cease to be a partner. Clause 32 provides for a voluntary retirement of a partner; clause 33 provides for retirement on the attainment of superannuation; and clause 41 provides for certain eventualities such as insolvency, professional misconduct or conviction of an offence involving moral turpitude upon which a partner shall become disqualified. Clause 35 of the Deed of Partnership provides as follows:-

(3.) On retirement from the firm, the petitioner became entitled to a sum of Rs.1,73,25,000/- which was payable in eight instalments. During the course of the previous year relevant to assessment year 2004-05, the petitioner received an amount of Rs.21,65,625/-, out of the total amount receivable. In his return of income for assessment year 2004-05, the petitioner disclosed receipt of the aforesaid amount and claimed, in a note appended to the return, that during the year he had retired from the firm with effect from 22nd October, 2003; the amount receivable on retirement was not liable to tax and out of the total amount, the aforesaid instalment has been received from the firm.