CIT v. Dewas Cine Corporation

68 ITR 240Supreme Court of India1968#9196 most cited

What is CIT v. Dewas Cine Corporation authority for?

The distribution, division, or allotment of assets of a firm to its partners upon dissolution is a mutual adjustment of rights and not a sale, exchange, or transfer of assets, thus not attracting capital gains tax.

12

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2018 to 2025.

Also referred to as

CIT v. Dewas Cine Corporation · section 45 · dissolution of firm · distribution of assets · mutual adjustment of rights · capital asset · transfer of asset

Sections most often in play

Section 45(4)Section 143(3)Section 153ASection 132Section 142(1)Section 143(2)Section 45(2)Section 292C
Read the full judgment

Issues it is cited on

section 47transfer of capital assetsection 45section 48fair market valuesection 292section 29assistant commissionerundisclosed incometransfersection 153section 153a

Judgments citing CIT v. Dewas Cine Corporation

Hemant Naresh Agarwal, Surat vs. Assistant Commissioner of Income Tax, Central Cir. 4, Surat

In the result, appeal of assessee is dismissed

ITA 170/SRT/2023[2020-21]Status: DisposedITAT Surat24 Oct 2025AY 2020-21

Bench: Shri Dinesh Mohan Sinha & Shri Bijayananda Prusethआ.(खो और ज).सं /It(Ss)A No.68 & 70/Srt/2023 Assessment Years: 2015-16 & 2018-19 (Physical Court Hearing) Deputy Commissioner Of Hemant Naresh Agarwal बनाम/ Income-Tax, Central Circle-4, 701, Shree Shyam Awas, Bhatar Vs. Surat Room No.508, 5Th Floor, Road, Near Vidhya Bharti School, Aayakar Bhawan, Majura Surat-395 010 Gate, Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Auppa 9003 J (अपीलाथ"/Appellant) (""थ" /Respondent) आयकर अपील सं./Ita.No.170/Srt/2023 Assessment Year: 2020-21 Hemant Naresh Agarwal Assistant Commissioner Of बनाम/ 701, Shree Shyam Awas, Bhatar Income-Tax, Central Circle-4, Vs. Road, Near Vidhya Bharti School, Surat, Aaykar Bhawan, Surat-395 010 Majura Gate, Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Auppa 9003 J (अपीलाथ"/Appellant) (""थ" /Respondent) िनधा"रती की ओर से /Assessee By Shri Kiran K. Shah राज" की ओर से /Revenue By Shri Mukesh Jain, Cit-Dr & Shri Kevin Langaliya, Ca सुनवाई की तारीख/Date Of Hearing 18/09/2025 उद्घोषणा की तारीख/Date Of Pronouncement 24/10/2025

Section 143(3)Section 250Section 292CSection 69

…stment of rights of the partners and such transactions was neither a sale nor exchange nor transfer of assets of the firm. The Respondent relies on following decision on issue of acquisition of assets. The Supreme Court in CIT v. Dewas Cine Corporation (1968) 68 ITR 240 (SC) and CIT vs. Bankey Lal Vaidya [1971] 79 ITR 594 (SC) held that the distribution, division or allotment of assets between partners of a firm consequent on its dissolution amounts to a mutual adjustment of rights of the partners and such transaction was neither a sale nor exchange nor transfer of assets of the firm. Further in Malabar Fisheries…

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)

…sequence of any sale, exchange or transfer of assets." 20. The Supreme Court upheld the contention of the assessee that no part of the amount of Rs.1,25,000 received by the assessee represented capital gains and relied on CIT v. Dewas Cine Corporation [1968] 68 ITR 240 (SC) referred to above. It held that adjustment of the rights of the partners in a dissolved firm by allotment of its assets is not a transfer for a price. The facts of the instant case are identical with the facts of the case in CIT v. Bankey Lal Vaidya [1971] 79 ITR 594 (SC) . 21. In CIT v. L. Raghu Kumar [1983] 141 ITR 674/[1982] 11 Taxman 163…

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)

…sequence of any sale, exchange or transfer of assets." 20. The Supreme Court upheld the contention of the assessee that no part of the amount of Rs.1,25,000 received by the assessee represented capital gains and relied on CIT v. Dewas Cine Corporation [1968] 68 ITR 240 (SC) referred to above. It held that adjustment of the rights of the partners in a dissolved firm by allotment of its assets is not a transfer for a price. The facts of the instant case are identical with the facts of the case in CIT v. Bankey Lal Vaidya [1971] 79 ITR 594 (SC) . 21. In CIT v. L. Raghu Kumar [1983] 141 ITR 674/[1982] 11 Taxman 163…

Assistant Commissioner of Income Tax Circle 2(1), Jabalpur vs. Chetanaya Promoters and Devlopers, Jabalpur

In the result, on this ground, appeal of the Revenue as well as appeal of the assessee is hereby dismissed

ITA 133/JAB/2018[2015-16]Status: DisposedITAT Jabalpur23 Nov 2023AY 2015-16

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Dhiraj Ghai, FCAFor Respondent: Smt. Garima Chaudhary, CIT-DR
Section 133ASection 143(2)Section 292BSection 43C

…IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH ‘DB’, JABALPUR Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 133/JAB/2018 : Asstt. Year: 2015-16 The DCIT, C-2(1), Vs Chetanya Promoter & Developers, Jabalpur, MP 353, Swarn Bhoomi, Chaggar Farm, Bilhari, Jabalpur, MP (APPELLANT) (RESPONDENT) PAN No. AAHFC 0135 H CO No. 09/JAB/2018, Asstt. Year: 2015-16 Arising out of ITA No. 133/JAB/2018 Chetanya Promoter & V The DCIT, C-2(1), Jabalpur, MP Developers, s 353, Swarn Bhoomi, Chaggar Farm, Bilhari, Jabalpur, MP (APPELLANT) (RESPONDENT) PAN No. AAHFC 0135 H Assessee b…

Vodafone Idea Ltd (Erstwhile Aditya Birla Telecom Ltd), Mumbai vs. PCIT-Circle 5, Mumbai

ITA 662/MUM/2022[2017-18]Status: DisposedITAT Mumbai01 Dec 2022AY 2017-18

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms Kavitha Rajagopal, Hon'Blevodafone Idea Limited V. Pcit – Circle 5 {Erstwhile Known As Aditya Birla Telecom Limited} Room No. 515, 5Thfloor Birla Centurion, 10Th Floor Aayakar Bhavan, M.K. Road Plot No. 794, B Wing Mumbai - 400020 Pandurang Budhkar Marg Worli, Mumbai – 400030 Pan: Aaacb2100P (Appellant) (Respondent) Assessee Represented By Shri J. D. Mistry : Shri Madhur Aggarwal & Shri Ninad Patade Department Represented By : Shri Achal Sharma

Section 143(3)Section 263

…hat same cannot be termed as 'sale. Therefore, it is submitted that the assessee hasnot undertaken any transaction for sale of Indus shares during AY 2017-18 Similar, principle has been upheld by courts in the following rulings • CIT v. Dewas Cine Corp (1968) 68 ITR 240 (SC) • Calcutta Electric Supply Corporation Ltd v. CIT (1951) 19 IT 406 (CAL) 11 Vodafone Idea Limited B.2.3 In any case, the computation mechanism fails as there is no consideration accruingor receivable by the Assessee Company on capital reduction 5.1.9 In any case, even where the distribution to a shareholder is to be considered as a transfer…

Tree Hill Estates Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, the appeal of the assessee is dismissed

ITA 1395/BANG/2018[2013-14]Status: DisposedITAT Bangalore18 May 2022AY 2013-14

Bench: Smt. Beena Pillai & Ms. Padmavathy Sassessment Year : 2013-14

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

…ld. AR relied on the following case laws to submit that the goodwill created by revaluation received by the retiring partner as part of reconstitution is not liable to tax:- (i) Mohanbhai Pamabhai (1973) 91 ITR 393 (Guj) (ii) CIT v. Bankey Lal Vaidya (1971) 79 ITR 594 (SC) (iii) Malabar Fisheries Co. v. CIT (1979) 120 ITR 49 (SC) (iv) Tribhuvandas G. Patel v. CIT (1999) 236 ITR 515 (SC) (v) CIT v. Karnataka Agro Chemicals (2014) 49 taxmann.com 324 (Kar) Page 6 of 20 (vi) Savitri Kadur v. DCIT (2019) 106 taxmann.com 314 (Bang. Trib.) (vii) New Kamlesh Jewellers v. ITO (2011) 9 taxmann.com 204 (Mum) 14. The ld.…

Soni Sonu Mirchandani, New Delhi vs. ACIT Central Circle-5, New Delhi

In the result, Ground Nos

ITA 1286/DEL/2020[2009-10]Status: DisposedITAT Delhi28 Sept 2020AY 2009-10

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

For Appellant: Ms. Deepashree Rao, C.A. And Shri Vibhu Gupta, C.AFor Respondent: Shri Shyam Anuragi, Sr. DR
Section 143(3)

…el./2020 Smt. Soni Sonu Mirchandani, New Delhi. re-alignment in family settlement does not constitute transfer. The assessee relied upon the following decisions : Ram Charan Cas vs., Girija Nandini Devi and Others 1. AIR 1966 SC 323. 2. Dewas Cine Corporation 68 ITR 240. 3. CIT vs., Bankey L1 Vaidya 79 ITR 594 4. CIT vs., Kay ARR Enterprises 299 ITR 348 3.5. The assessee, therefore, submitted that in the light of above settled position of Law, the amount received under the Family Settlement is not liable to tax under the Act. The assessee has furnished the bank statement evidencing the receipt of owelty amount in…

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

…rtner cannot be “deemed” as transfer of interest in the assets of partnership firm u/s. 2 (47) of the Act and as such there is no liability under the head “capital gain” in the hands of the retiring partner u/s. 45 of the Act :- 1) CIT Vs. Dewas Cine Corpn 68 ITR 240 2) CIT Vs. Bankey Lal Vaidya 79 ITR 594 3) CIT Vs. Mohanbhai Pamabhai 165 ITR166 4) Tribhuvan G. Patel Vs. CIT 236 ITR 515 5) Prashant S. Joshi Vs. ITO 324 ITR 154 (Bom) 6) Chalasani Venkatsara Rao Vs. ITO 349 ITR 423 (A) 7) CIT Vs. L. Raghu Kumar 141 ITR 674 (AP) 8) CIT Vs. P. H. Patel 171 ITR 128 (AP) 9) CIT Vs. G. Seshagiri Rao 213 ITR 3…

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

…interest in the assets of partnership firm u/s. 2 (47) of the Act and as such there is no liability under the head “capital gain” in the hands of the retiring partner u/s. 45 of the Act :- 1) CIT Vs. Dewas Cine Corpn 68 ITR 240 2) CIT Vs. Bankey Lal Vaidya 79 ITR 594 3) CIT Vs. Mohanbhai Pamabhai 165 ITR166 4) Tribhuvan G. Patel Vs. CIT 236 ITR 515 5) Prashant S. Joshi Vs. ITO 324 ITR 154 (Bom) 6) Chalasani Venkatsara Rao Vs. ITO 349 ITR 423 (A) 7) CIT Vs. L. Raghu Kumar 141 ITR 674 (AP) 8) CIT Vs. P. H. Patel 171 ITR 128 (AP) 9) CIT Vs. G. Seshagiri Rao 213 ITR 304 (AP) 10) Bankey Lal Vaidya Vs. CIT 55…

Skylark Build, Mumbai vs. Asst CIT Cen Cir 4(2), Mumbai

ITA 4370/MUM/2015[2007-08]Status: DisposedITAT Mumbai29 Aug 2018AY 2007-08

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2007-08 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K Assessment Year: 2008-09 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K

…answered the second question in the affirmative and against the assessee and, in view of that answer, declined to answer the first question as being unnecessary. The High Court took the view that this court's decisions in Dewas Cine Corporation's case [1968] 68 ITR 240 (SC) and Bankey Lal Vaidya's case [1971] 79 ITR 594 (SC), to the effect that the distribution, division or allotment of assets between partners of a firm consequent on its dissolution amounts to a mutual adjustment of rights of the partners and does not amount to a sale or transfer had been rendered under the Indian I.T. Act, 1922, wherein the exp…

Skylark Build, Mumbai vs. Asst CIT Cen Cir 4(2), Mumbai

ITA 3237/MUM/2015[2008-09]Status: DisposedITAT Mumbai29 Aug 2018AY 2008-09

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2007-08 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K Assessment Year: 2008-09 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K

…answered the second question in the affirmative and against the assessee and, in view of that answer, declined to answer the first question as being unnecessary. The High Court took the view that this court's decisions in Dewas Cine Corporation's case [1968] 68 ITR 240 (SC) and Bankey Lal Vaidya's case [1971] 79 ITR 594 (SC), to the effect that the distribution, division or allotment of assets between partners of a firm consequent on its dissolution amounts to a mutual adjustment of rights of the partners and does not amount to a sale or transfer had been rendered under the Indian I.T. Act, 1922, wherein the exp…

DCIT Cen Cir 4(2), Mumbai vs. Sudhakar M. Shetty, Mumbai

ITA 2906/MUM/2015[2011-12]Status: DisposedITAT Mumbai29 Aug 2018AY 2011-12

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2007-08 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K Assessment Year: 2008-09 M/S. Skylark Build Acit, Central Circle-4(2) 402, Sagar Avenue 4Th Floor, Aayakar Bhavan बनाम/ Plot B-54, Junction Of M.K.Road, Vs. Lallubhai Park & S.V. Road Mumbai 400020 Andheri (W), Mumbai 400058 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aazfs0404K

…against the assessee and, in view of that answer, declined to answer the first question as being unnecessary. The High Court took the view that this court's decisions in Dewas Cine Corporation's case [1968] 68 ITR 240 (SC) and Bankey Lal Vaidya's case [1971] 79 ITR 594 (SC), to the effect that the distribution, division or allotment of assets between partners of a firm consequent on its dissolution amounts to a mutual adjustment of rights of the partners and does not amount to a sale or transfer had been rendered under the Indian I.T. Act, 1922, wherein the expression " sale" or " transfer " had not been defined…