Chalasani Venkateswara Rao v. ITO

349 ITR 423High Court2012#10853 most cited

What is Chalasani Venkateswara Rao v. ITO authority for?

Sums received by a partner on retirement, representing balances in their capital or current account, are not taxable as capital gains as they do not constitute a 'transfer' of interest in the firm's assets under Section 2(47) of the Income Tax Act.

10

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2017 to 2025.

Also referred to as

Chalasani Venkateswara Rao v. ITO · Section 45 · Section 2(47) · retirement from partnership · capital balance · current account · not taxable as capital gains · deemed transfer

Sections most often in play

Section 132Section 142(1)Section 143(2)Section 143(3)Section 153ASection 45(2)Section 45(4)Section 47(2)

Judgments citing Chalasani Venkateswara Rao v. ITO

M/S. Anand Diagnostic Laboratory, Bengaluru vs. The Deputy Commissioner of Income Tax, Central Circle-2(4), Bengaluru

In the result, the appeal by the assessee is partly allowed

ITA 969/BANG/2024[2018-19]Status: DisposedITAT Bangalore29 Apr 2025AY 2018-19

Bench: Shri Prashant Maharishi & Shri Soundararajan K.

For Appellant: Shri Arjunraj, AdvocateFor Respondent: Shri Netrapal M S, Addl. CIT(DR)(ITAT)
Section 143Section 143(3)

…UF [2023] 151 taxmann.com 375/293 Taxman 511/454 ITR 426 (SC). 13. At this juncture, it would be relevant to take note of the decision of a Division Bench of this High Court in Chalasani Venkateswara Rao v. ITO [2012] 25 taxmann.com 378/211 Taxman 110 (Mag.)/349 ITR 423 ITA Nos.968 & 969/Bang/2024 Page 26 of 35 (A.P.), wherein this Court, under similar circumstances, held at paragraph Nos.19 to 22 as under : "19. In CIT v. Bankey Lal Vaidya [1971] 79 ITR 594 (SC), the Supreme Court held that a partner in a firm (carrying on business of manufacturing and selling pharmaceutical products and literature relating…

M/S. Anand Diagnostic Laboratory, Bengaluru vs. The Deputy Commissioner of Income Tax, Central Circle-2(4), Bengaluru

In the result, the appeal by the assessee is partly allowed

ITA 968/BANG/2024[2017-18]Status: DisposedITAT Bangalore29 Apr 2025AY 2017-18

Bench: Shri Prashant Maharishi & Shri Soundararajan K.

For Appellant: Shri Arjunraj, AdvocateFor Respondent: Shri Netrapal M S, Addl. CIT(DR)(ITAT)
Section 143Section 143(3)

…UF [2023] 151 taxmann.com 375/293 Taxman 511/454 ITR 426 (SC). 13. At this juncture, it would be relevant to take note of the decision of a Division Bench of this High Court in Chalasani Venkateswara Rao v. ITO [2012] 25 taxmann.com 378/211 Taxman 110 (Mag.)/349 ITR 423 ITA Nos.968 & 969/Bang/2024 Page 26 of 35 (A.P.), wherein this Court, under similar circumstances, held at paragraph Nos.19 to 22 as under : "19. In CIT v. Bankey Lal Vaidya [1971] 79 ITR 594 (SC), the Supreme Court held that a partner in a firm (carrying on business of manufacturing and selling pharmaceutical products and literature relating…

M/S Multiventure Financial Services Pvt Ltd., Mumbai vs. ITO 3 (2)(2), Mumbai

In the result, the appeals of the Revenue are dismissed and the appeal of the assessee is allowed

ITA 4882/MUM/2019[2010-11]Status: DisposedITAT Mumbai22 Feb 2021AY 2010-11

Bench: Shri Rajesh Kumar & Shri Amarjit Singh

For Appellant: Shri Vishnu Aggarwal, A.RFor Respondent: Shri Bharat Andhala, D.R
Section 143(3)Section 2Section 2(47)

…IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “D”, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA Nos.3715, 3716 & 3717/M/2019 Assessment Years: 2010-11, 2011-12, 2013-14 Income Tax Officer- M/s. Multiventure 3(2)(2), Financial Services Pvt. Room No.673A, 6th Floor, Ltd., Aayakar Bhavan, Vs. 113, 1st Floor, Maker M.K. Road, Chamber-V, Mumbai - 400020 Nariman Point, Mumbai – 400 021 PAN: AADCM 2372F (Appellant) (Respondent) Assessment Year: 2013-14 Income Tax Officer- M/s. Multiventure 3(2)(2), Properties Pvt. Ltd., Room No.673A, 6th Floor, 113, 1st Floor,…

ITO - 3(2)(2), Mumbai vs. M/S Multiventure Financial Services Pvt. Ltd, Mumbai

In the result, the appeals of the Revenue are dismissed and the appeal of the assessee is allowed

ITA 3715/MUM/2019[2010-11]Status: DisposedITAT Mumbai22 Feb 2021AY 2010-11

Bench: Shri Rajesh Kumar & Shri Amarjit Singh

For Appellant: Shri Vishnu Aggarwal, A.RFor Respondent: Shri Bharat Andhala, D.R
Section 143(3)Section 2Section 2(47)

…IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “D”, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA Nos.3715, 3716 & 3717/M/2019 Assessment Years: 2010-11, 2011-12, 2013-14 Income Tax Officer- M/s. Multiventure 3(2)(2), Financial Services Pvt. Room No.673A, 6th Floor, Ltd., Aayakar Bhavan, Vs. 113, 1st Floor, Maker M.K. Road, Chamber-V, Mumbai - 400020 Nariman Point, Mumbai – 400 021 PAN: AADCM 2372F (Appellant) (Respondent) Assessment Year: 2013-14 Income Tax Officer- M/s. Multiventure 3(2)(2), Properties Pvt. Ltd., Room No.673A, 6th Floor, 113, 1st Floor,…

Mdlr Estates Pvt. Ltd., New Delhi vs. DCIT, Central Circle-14, New Delhi

In the result, both the appeals filed by the respective assessees are partly allowed for statistical purpose

ITA 8215/DEL/2018[2008-09]Status: DisposedITAT Delhi11 Jun 2019AY 2008-09

Bench: Sh. R. K. Panda & Sh. Kuldip Singhassessment Year: 2008-09

Section 142Section 144Section 153ASection 264

…ons he submitted that sum received on retirement from partnership firm which is outstanding as capital balance to the credit of account of partners account is not taxable :- 1. Prashant S. Joshi Vs. ITO 324 ITR 154 (Bom) 2. Chalasani Venkatesara Rao Vs. ITO 349 ITR 423 (A. P.) 3. CIT Vs. Dynamic Enterprises 359 ITR 83 (Kar) 4. CIT Vs. Mohanbhai Pamabhai 91 ITR 393 (Guj) He also relied on various decisions of the coordinate benches of the Tribunal on this proposition. 15. Referring to the following decisions he submitted that sum standing to the credit in the current account or capital account of the retir…

Mdlr Builders P.Ltd, New Delhi vs. DCIT, Central Circle-14, New Delhi

In the result, both the appeals filed by the respective assessees are partly allowed for statistical purpose

ITA 8214/DEL/2018[2008-09]Status: DisposedITAT Delhi11 Jun 2019AY 2008-09

Bench: Sh. R. K. Panda & Sh. Kuldip Singhassessment Year: 2008-09

Section 142Section 144Section 153ASection 264

…ons he submitted that sum received on retirement from partnership firm which is outstanding as capital balance to the credit of account of partners account is not taxable :- 1. Prashant S. Joshi Vs. ITO 324 ITR 154 (Bom) 2. Chalasani Venkatesara Rao Vs. ITO 349 ITR 423 (A. P.) 3. CIT Vs. Dynamic Enterprises 359 ITR 83 (Kar) 4. CIT Vs. Mohanbhai Pamabhai 91 ITR 393 (Guj) He also relied on various decisions of the coordinate benches of the Tribunal on this proposition. 15. Referring to the following decisions he submitted that sum standing to the credit in the current account or capital account of the retir…

ITO 16(3)(3), Mumbai vs. Ramal P. Advani, Mumbai

In the result, the appeals filed by the Revenue stand dismissed

ITA 6491/MUM/2016[2010-11]Status: DisposedITAT Mumbai27 Aug 2018AY 2010-11

Bench: Shri Shamim Yahya, Am & Shri Pawan Singh, Jm

For Appellant: Shri Nilesh Zaveri
Section 55F

…mal P. Advani taxable in the hands of the assessee. In this connection, the ld. Commissioner of Income Tax (Appeals) referred to the certain other case laws from the Hon’ble Andhra Pradhesh High Court in the case of Chalasani Venkateswara Rao vs. ITO [2012] 349 ITR 423 (AP). Following these cases laws, the ld. Commissioner of Income Tax (Appeals) held that the liability of capital gain cannot be fastened in respect of payment of Rs.2.95 crores received by the assessee from the other partner. 7. Against the above order, the Revenue is in appeal before us. 8. We have heard both the counsel and perused the re…

Puranjit Mukherjee, Kolkata vs. DCIT, Cir-26, Kolkata

In the result, the appeals filed by the assessee in ITA Nos

ITA 1358/KOL/2015[2009-2010]Status: DisposedITAT Kolkata23 May 2018AY 2009-2010

Bench: : Shri M. Balaganesh & Shri S.S.Viswanethra Ravia.Y 2009-10

For Appellant: Shri A.K. Gupta, FCA, ld.ARFor Respondent: Shri S. Dasgupta, Addl. CIT ( ld.DR)
Section 45(4)Section 55

…at there was no transfer of any asset or goodwill by the assessee on his retirement to the partnership firm. For this conclusion, the Tribunal relied on the decision of the Hon’ble Andhra Pradesh High Court in the case of Chalasani Venkateswara Rao –vs.- ITO [349 ITR 423], wherein it was held that the amount received by the assessee as full and final settlement on dissolution of firm could not give rise to any capital gain chargeable to tax as there was no transfer of any capital asset. 6. The ld. counsel for the assessee has also relied in support of the assessee’s case on the issue under consideration on the de…

Amit Kumar Choudhury, Kolkata vs. DCIT, Cir-6, Kolkata

In the result, the appeal of the assessee is allowed

ITA 1357/KOL/2015[2009-2010]Status: DisposedITAT Kolkata19 Feb 2018AY 2009-2010

Bench: Shri P.M. Jagtap & Shri S.S.Viswanethra Ravi

Section 147Section 148Section 55(2)(a)

…at there was no transfer of any asset or goodwill by the assessee on his retirement to the partnership firm. For this conclusion, the Tribunal relied on the decision of the Hon’ble Andhra Pradesh High Court in the case of Chalasani Venkateswara Rao –vs.- ITO [349 ITR 423], wherein it was held that the amount received by the assessee as full and final settlement on dissolution of firm could not give rise to any capital gain chargeable to tax as there was no transfer of any capital asset. 6. The ld. counsel for the assessee has also relied in support of the assessee’s case on the issue under consideration on the d…

The Hindustan Lungi Company, Chennai vs. ACIT, Vellore

In the result, the appeal of the assessee stands dismissed

ITA 618/CHNY/2016[2007-08]Status: DisposedITAT Chennai25 Jan 2017AY 2007-08

Bench: Shri Abraham P. George]

For Appellant: Shri. A.S. Sriraman, Advocate
Section 45(4)

…ssets. Reliance was placed by the assessee on the judgment of Hon’ble Punjab and Haryana High Court in the case of Raman Lal Khanna vs. CIT 84 ITR 217 and that of judgment of Hon’ble Andhra Pradesh High Court in the case of Chalasani Venkateswara Rao vs. ITO 349 ITR 423. ITA No.618/Mds/2016. :- 4 -: 5. However, ld. Commissioner of Income Tax (Appeals) was not impressed by the above arguments. According to him by virtue of judgment of Hon’ble Bombay High Court in the case of CIT vs. A.N. Naik Associates 265 ITR 346, the word ‘’otherwise’’ used in Sec. 45(4) of the Act took into its sweep, not only cases of dis…

Chalasani Venkateswara Rao v. ITO (349 ITR 423) — Cited in 10 Judgments | BharatTax