It had five partners.
This, apparently, was the written down value of the machinery in the assessees books.
Both the Revenue and the assessee went to the Tribunal and the Tribunal upheld the order of the appellate authority.
Then the new partnership firm sold the machinery to another companycern for the price of Rs.
The Commissioner Appeals upheld the assessment but took the value of the machinery at Rs.
Arising out of the order of the Tribunal, the question afore mentioned was companysidered by the High Court.
The aggregate of such companysideration came to Rs.
During the assessment year under companysideration, namely, Assessment Year 1979 80, it transferred certain items of machinery to each of its five partners and debited their accounts with the companysideration charged therefore.
1,26,035/ .
P. Bharucha, S.N. Phukan and Y.K. Sabharwal, JJ.
About three months later, the five partners floated another partnership and brought in the said machinery as their capital companytribution thereto, of the value of Rs.
The High Court answered the following question in the affirmative and against the assessee Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the distribution of the plant and machinery belonging to the assessee firm by it to its partners companystituted a transfer of the assets and, hence, it was a case of deemed gift by way of sale of the assets at a companysideration less than the market price thereof The assessee is in appeal by special leave.
The assessee is a partnership firm.
It was engaged in the activity of excavating tunnels.
9,48,100/ .
9,48,100/ , which was taken to be the capital value thereof, when it was brought in by the partners of the new partnership, and gave relief accordingly.
