Karnataka H.C : Consideration received by assessee medical relief society on account of relinquishment of its right in a firm would be leviable for capital gain tax or not,

High Court Of Karnataka

CIT Vs. Medical Relief Society Of South Kanara

Section : 10(23C), 45

Assessment Year : 2001-02

N.K. Patil And Mrs. Rathnakala, JJ.

IT Appeal No. 1020 Of 2008

December 15, 2014

JUDGMENT

N.K. Patil, J. – In this appeal, the appellants are questioning the correctness of the order dated June 26, 2008, bearing COB. No. 24/Bang/2008 (in I. T. A. No. 415/Bang/2008), on the file of the Income-tax Appellate Tribunal, Bangalore, confirming the order passed by the Appellate Commissioner and confirm the order passed by the Assistant Commissioner of Income-tax, Central Circle-2(3), Bangalore.

2. In this case, the only substantial question of law to be considered is, whether the appellate authorities were correct in holding that the relinquishment of a right in the partnership firm, Bangalore Housing Development and Investment (Morzaria Housing Complex), by the assessee and the receipt of the consideration of Rs. 33,66,99,989 would not amount to a transfer and no capital gains tax is leviable and whether it is independent of exemption under section 10(23C)(via) of the Act.

3. We have heard the learned counsel appearing for the appellants and the learned counsel appearing for the respondent.

4. During the course of submission, the counsel appearing for the appellants, submitted that, in the light of the judgment of the co-ordinate Bench of this court dated April 1, 2013, passed in I. T. A. No. 1344 of 2006 in the case of CIT v. Manipal Academy of Higher Education (MAHE) [2013] 357 ITR 114/218 Taxman 1/36 taxmann.com 81 (Kar.), this appeal may be disposed of setting aside the order passed by the Appellate Commissioner and the Income-tax Appellate Tribunal and also the order passed by the assessing authority to enable the original authority to consider the matter afresh in accordance with law, in the light of the order passed by the co-ordinate Bench of this court dated April 1, 2013, passed in I.T.A. No. 1344 of 2006 Manipal Academy of Higher Education (supra) and also relevant provisions of the Act and Rules where exemption given to the respondent is sustainable in law.

5. In reply to the submission made by the learned counsel appearing for the appellants, learned counsel appearing for the respondent Sri S. Parthasarathi fairly submitted and not disputed the judgment passed by the co-ordinate Bench of this court dated April 1, 2013, passed in I.T.A. No. 1344 of 2006 Manipal Academy of Higher Education (supra) and he fairly submits that the submission made by the counsel appearing for the appellants, as stated supra, may be placed on record and this appeal may be disposed of, in terms of the judgment passed in I. T. A. No. 1344 of 2006 dated April 1, 2013, Manipal Academy of Higher Education (supra) leaving open all the contentions urged by both the parties.

6. The submissions made by the learned counsel appearing for the appellants and learned counsel appearing for the respondent, as stated supra, are placed on record.

7. This appeal is allowed in terms of the judgment dated April 1, 2013, passed in I.T.A. No. 1344 of 2006 Manipal Academy of Higher Education (supra), setting aside the order passed by the assessing authority, the Appellate Commissioner and Income-tax Appellate Tribunal respectively and the matter stands remitted back to the assessing authority.

8. It is needless to clarify that the remaining substantial questions of law raised in the memorandum of appeal are left open and it is the duty of the assessing authority to consider the same after affording opportunity of hearing to both the parties afresh and to pass appropriate orders in accordance with law, in the light of the judgment dated April 1, 2013 passed in I.T.A. No. 1344 of 2006 by the co-ordinate Bench of this court in Manipal Academy of Higher Education (supra).

9. All the contentions urged by both the parties are left open.

[Citation : 370 ITR 497]