M K MAHENDALE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) TWO questions are raised in this reference at the instance of the assessee, made under S. 256(1) of the IT Act, 1961 ('the Act'). The questions read thus :

(2.) WE have read the statement of the case and have heard the counsels. Our attention has been drawn to the judgments of the Supreme Court in CIT vs. Hind Construction Ltd. 1974 CTR (SC) 157 : (1972) 83 ITR 211 (SC) and in Sunil Siddharthbhai vs. CIT (1985) 49 CTR (SC) 172 : (1985) 156 ITR 509 (SC). We find that in both these cases there was a clear finding of fact that the erstwhile sole proprietor had brought into the partnership firm that he formed the assets of the sole proprietary concern as his contribution to the capital of the partnership firm. In the statement of the case before us, and, indeed, from the deed of partnership, we are unable to as certain whether has brought into the partnership firm that he formed with his wife the assets of his sole proprietary concern as his contribution to the capital of the partnership firm or whether the transaction was of some different nature. This factual position not having been ascertained, we do not find it possible to answer the question that have been posed and the counsels for the assessee and the Revenue have fairly agreed that that is so.

(3.) THE Tribunal shall hear the parties afresh and shall permit them to lead further evidence, should they so desire. The Tribunal shall then pass a fresh order according to law.