CIT v. Dynamic Enterprises

359 ITR 83High Court2013#8430 most cited

What is CIT v. Dynamic Enterprises authority for?

Section 45(4) of the Income Tax Act is attracted only when there is a transfer of a capital asset by a firm in favour of a partner, resulting in the extinguishment of the firm's interest and vesting of exclusive interest in the partner.

13

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2025.

Also referred to as

CIT v. Dynamic Enterprises · 359 ITR 83 · Section 45(4) · capital gains · dissolution of firm · transfer of capital asset · firm to partner · exclusive interest

Judgments citing CIT v. Dynamic Enterprises

Prakash Cotton Mills Pvt Ltd, Mumbai vs. Dy CIT, Circle 8(2)(1), Mumbai

In the result, ground No. 9 to 14 is allowed

ITA 2639/MUM/2025[2012-13]Status: DisposedITAT Mumbai26 Sept 2025AY 2012-13

Bench: Shri Pawan Singh& Shri Arun Khodpia

Section 143(3)Section 147Section 148Section 151(1)Section 254(1)Section 45(4)Section 48

…the view that where property was never transferred to partner on dissolution of firm, capital gain to be taxed in the hands of firm. The learned Senior Counsel by referring the decision of Karnataka High Court in CIT vs Dynamic Enterprises reported in (2013) 359 ITR 83 (Kar)(FB)would submit that High Court, while discussing the provisions of sub section (4) of section 45 held that in order to attract sub section (4) of section 45 of the Act, the condition precedent are (i) there should be a distribution of capital asset of a firm; (ii) such distribution is a result of any transfer of capital asset by firm in fav…

ACIT(Central)-1, Indore vs. Shri Raunak Maru, Indore

The appeals of the Revenue are dismissed

ITA 27/IND/2021[2013-14]Status: DisposedITAT Indore15 Mar 2022AY 2013-14

Bench: Shri Mahavir Prasad & Shri Manish Borad

Section 132Section 143(3)Section 148Section 153A

…आयकर अपील"य अ"धकरण, इंदौर "यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING Assessment Year:2013-14 ACIT (Central)-1, Shri Rajul Bhargava, Indore Indore बनाम/ (Appellant) (Respondent ) Vs. P.A. No.AICPP7540A Assessment Year:2013-14 ACIT (Central)-1, Shri Raunak Maru, Indore Indore बनाम/ (Appellant) (Respondent ) Vs. P.A. No.BQDPM6420L Revenue by Shri Amit Soni, Sr.DR Assessee by Shri Ajay Tulsiyan, CA Date of Hearing: 19.01.2022 Date of Pronouncement: 21. 03.2022 आदेश / O R D E R PE…

ACIT(Central)-1, Indore vs. Shri Rajul Bhargava, Indore

The appeals of the Revenue are dismissed

ITA 26/IND/2021[2013-14]Status: DisposedITAT Indore15 Mar 2022AY 2013-14

Bench: Shri Mahavir Prasad & Shri Manish Borad

Section 132Section 143(3)Section 148Section 153A

…आयकर अपील"य अ"धकरण, इंदौर "यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING Assessment Year:2013-14 ACIT (Central)-1, Shri Rajul Bhargava, Indore Indore बनाम/ (Appellant) (Respondent ) Vs. P.A. No.AICPP7540A Assessment Year:2013-14 ACIT (Central)-1, Shri Raunak Maru, Indore Indore बनाम/ (Appellant) (Respondent ) Vs. P.A. No.BQDPM6420L Revenue by Shri Amit Soni, Sr.DR Assessee by Shri Ajay Tulsiyan, CA Date of Hearing: 19.01.2022 Date of Pronouncement: 21. 03.2022 आदेश / O R D E R PE…

Indian Extrusions, Mumbai vs. ACIT 24(3), Mumbai

The appeal of the assessee is allowed in terms of our aforesaid observations

ITA 1994/MUM/2017[2010-11]Status: DisposedITAT Mumbai23 Jun 2021AY 2010-11

Bench: Shri M.Balaganesh () & Shri Ravish Sood () M/S Indian Extrusions Acit-24(3) B-316/317, Virwani Industrial Vs. Mumbai. Estate,Western Express Highway, Goregaon East, Mumbai – 400 063 (Assessee) (Revenue)

For Appellant: Shri Vijay Mehta, A.RFor Respondent: Ms. Shreekala Pardeshi, D.R
Section 143(1)Section 143(2)Section 143(3)Section 45(4)

…such as retirement of the partners. The ld. A.R ITA No.1994/Mum/2017 A.Y. 2010-11 12 M/s Indian Extrusions Vs. ACIT-24(3) had further relied on the judgment of the „Full bench‟ of the Hon‟ble High Court of Karnataka in the case of CIT Vs. Dynamic Enterprise 359 ITR 83 (Kar) (FB). It was submitted by the ld. A.R that the Hon‟ble High Court in its aforesaid order, had observed, that in order to attract Sec. 45(4) of the Act the capital asset of the firm should be transferred in favour of a partner, as a result whereof, the firm ceases to have any interest in the capital asset transferred while for the partner got…

Anik Industries Ltd, Mumbai vs. DCIT CC 40, Mumbai

The appeal stands allowed

ITA 7189/MUM/2014[2010-11]Status: DisposedITAT Mumbai19 Mar 2020AY 2010-11

Bench: Shri Saktijit Dey, Jm & Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ I.T.A. No.7189/Mum/2014 (िनधा"रण वष" / Assessment Year:2010-11) M/S. Anik Industries Ltd. Dcit-Central Circle -40 बनाम/ 610, Tulsiani Chambers Mumbai. Vs. Nariman Point, Mumbai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacm-2696-K (अपीलाथ"/Appellant) : (""थ" / Respondent) & आयकरअपील सं./ I.T.A. No.5234/Mum/2016 (िनधा"रण वष" / Assessment Year:2012-13) M/S. Anik Industries Ltd. Dcit-Central Circle -40 बनाम/ 610, Tulsiani Chambers Mumbai. Vs. Nariman Point, Mumbai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacm-2696-K (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri Bhupendra Shah-Ld. Ar ""थ"कीओरसे/Respondent By : Shri Manoj Kumar-Ld. Dr सुनवाईकीतारीख/ : 17/01/2020 Date Of Hearing घोषणाकीतारीख / : 19/03/2020 Date Of Pronouncement

For Appellant: Shri Bhupendra Shah-Ld. ARFor Respondent: Shri Manoj Kumar-Ld. DR
Section 143(3)

…court in subsequent decisions titled as Pr.CIT V/s Electroplast Engineers (104 Taxmann.com 444 26/03/2019) which follows the decision of Hon’ble Karnataka High M/s Anik Industries Ltd. Assessment Years-2010-11 & 2012-13 Court in CIT V/s Dynamic Enterprises (359 ITR 83 2013). Similar is the view of Hon’ble court in Pr.CIT V/s R.F.Nangrani HUF (2018 93 Taxmann.com 302). Similar is the view of Hon’ble Madras court in National Company V/s ACIT (2019 105 Taxmann.com 255). 6.4 On the other hand, the facts in the case law of Ahmedabad Tribunal in Samir Suryakant Sheth V/s ACIT (ITA No.2919 & 3092/Ahd/2002) were differ…

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

…m 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 retiring partner cannot be “deemed” as transfer of inter…

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

…m 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 retiring partner cannot be “deemed” as transfer of inter…

Smt. Savitri Kadur, Bangalore vs. Deputy Commissioner of Income-Tax, Bangalore

In the result, the appeal of the assessee is allowed to the extent indicated above

ITA 1700/BANG/2016[2008-09]Status: DisposedITAT Bangalore03 May 2019AY 2008-09

Bench: Shri N.V. Vasudevan & Shri Jason P Boazassessment Year : 2008-09

For Appellant: Shri Padamchand Khincha, C.AFor Respondent: Dr. Pradeep Kumar, Addl. CIT(DR)
Section 2(47)Section 45Section 54E

…a sum of Rs.38,38,200/- has been shown as Goodwill in the books of the Assessee and also in the capital account of the Assessee. The assessee also placed reliance on the decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Dynamic Enterprises, 359 ITR 83 (Kar). The CIT(A) however placed reliance on the decision of the Hon’ble Bombay High Court in the case of CIT Vs. A.N Naik Associates, 265 ITR 246 (Bom) wherein the Hon’ble Bombay High Court took the view that u/s 45(4) of the Act there would be charge to the capital gains tax when the assets of the partnership is transferred on a retiring partner…

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)

…ooks and no actual transfer took place. The Authorized Representative (AIR) relied on Hon'ble Supreme Court .Judgement in the case of CIT Vs. Mohanbhai Pamabhai 225 ITR 221 and Horr'ble Karnataka High Court Judgement in the case of CIT Vs. Dynamic Enterprises 359 ITR 83 Full Bench and also CIT Vs. Karnataka Agro Chemicals. I have gone through the judgement relied upon by the Ld. Authorized Representative in the case of Mohanbhai Parnabhai of Hori'ble Supreme Court and it was delivered on February 12, 1987 i.e. before amendment to section 55 of Income Tax Act. Therefore, Hon'ble Supreme Court Judgement is not hel…

Mahul Constructoin Corporation, Mumbai vs. ITO 24(1)(1), Mumbai

In the result, the appeal of assessee is allowed

ITA 2784/MUM/2017[2009-10]Status: DisposedITAT Mumbai24 Nov 2017AY 2009-10

Bench: Sri Mahavir Singh, Jm & Sri N.K. Pradhan, Am Mahul Construction Income Tax Officer, Corporation Ward 31(2)(3), M/S Thar & Co. Chartered Room No. 704, C-11, Accountants, Pratyaksh Kar Bhavan, Vs. 203, Capri, Opp. Hdil Tower, Bnadra Kurla Complex, Anant Kanekar Mar, Bandra Bandra (East), (East), Mumbai-400 051 Mumbai-400 051 Appellant .. Respondent Pan No. Aamfm5810E

For Appellant: K. Shivaram &For Respondent: Jacinta zimik Vashai, DR
Section 143(3)Section 2(14)Section 45(4)

…ime of retirement and therefore provisions of section 45(4) are not applicable. 13. For this proposition, the learned counsel for the assessee relied on the decision of Hon’ble Karnataka High Court full Bench in the case of CIT vs. Dynamic Enterprises (2013) 359 ITR 83 (Kar), wherein Hon’ble High Court held that section 45(4) of the Act is not applicable as there is no transfer of asset by the firm to the partners and the facts were that the P. Firm had purchased land and 5 persons became new partners and after a year three old partners retired after revaluation by taking cash towards value of their share. Even…

ACIT 18(2), Mumbai vs. Keshav & Company, Mumbai

ITA 6276/MUM/2012[2006-07]Status: DisposedITAT Mumbai30 Sept 2016AY 2006-07

Bench: Shri Amit Shukla & Shri Ashwani Tanejaita No. : 5639/Mum/2012 (Assessment Year: 2006-07) Vs Keshav & Company, Ito –Ward-22(1)(4), B-607, Arihant Bldg., 6Th Floor, Sudha Park, Vashi Railway Station, Behind Garodia Nagar, Vashi, Navi Mumbai Ghatkopar (E), Mumbai -400 077 Pan:Aacpk 1625 P ""यथ" (Respondent) अपीलाथ" (Appellant) Ito –Ward-22(1)(4), Vs Keshav & Company, Vashi, Navi Mumbai Mumbai -400 077 ""यथ" (Respondent) अपीलाथ" (Appellant) C.O. No. 273/Mum/2013 Arising Out Of Ita No.6276/Mum/2012, Ay-2006-07 Keshav & Company, Vs Ito –Ward-22(1)(4), Mumbai -400 077 Vashi, Navi Mumbai ""यथ" (Respondent) अपीलाथ" (Appellant) Assessee "ी राजन वोहरा : Shri Rajan Vohra Cross Objector By "ी बी पृसेठ Shri B Pruseth Revenue By : सुनवाई क" तार"ख /Date Of Hearing : 13-07-2016 घोषणा क" तार"ख /Date Of Pronouncement : 30-09-2016

Section 143(3)Section 147Section 234ASection 234BSection 45(4)

…आयकर अपीलीय अिधकरण “ए” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI "ी अिमत शु"ला, "याियक सद"य एवं "ी अशवनी तनेजा, लेखा सद"य के सम" । BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA No. : 5639/Mum/2012 (Assessment year: 2006-07) Vs Keshav and Company, ITO –Ward-22(1)(4), B-607, Arihant Bldg., 6th Floor, Sudha Park, Vashi Railway Station, Behind Garodia Nagar, Vashi, Navi Mumbai Ghatkopar (E), Mumbai -400 077 PAN:AACPK 1625 P ""यथ" (Respondent) अपीलाथ" (Appellant) ITO –Ward-22(1)(4), Vs Keshav and Company, Vashi, Navi Mumbai Mumbai -400 07…

Keshav and Company, Mumbai vs. Asst CIT 18(2), Mumbai

ITA 5639/MUM/2012[2006-07]Status: DisposedITAT Mumbai30 Sept 2016AY 2006-07

Bench: Shri Amit Shukla & Shri Ashwani Tanejaita No. : 5639/Mum/2012 (Assessment Year: 2006-07) Vs Keshav & Company, Ito –Ward-22(1)(4), B-607, Arihant Bldg., 6Th Floor, Sudha Park, Vashi Railway Station, Behind Garodia Nagar, Vashi, Navi Mumbai Ghatkopar (E), Mumbai -400 077 Pan:Aacpk 1625 P ""यथ" (Respondent) अपीलाथ" (Appellant) Ito –Ward-22(1)(4), Vs Keshav & Company, Vashi, Navi Mumbai Mumbai -400 077 ""यथ" (Respondent) अपीलाथ" (Appellant) C.O. No. 273/Mum/2013 Arising Out Of Ita No.6276/Mum/2012, Ay-2006-07 Keshav & Company, Vs Ito –Ward-22(1)(4), Mumbai -400 077 Vashi, Navi Mumbai ""यथ" (Respondent) अपीलाथ" (Appellant) Assessee "ी राजन वोहरा : Shri Rajan Vohra Cross Objector By "ी बी पृसेठ Shri B Pruseth Revenue By : सुनवाई क" तार"ख /Date Of Hearing : 13-07-2016 घोषणा क" तार"ख /Date Of Pronouncement : 30-09-2016

Section 143(3)Section 147Section 234ASection 234BSection 45(4)

…आयकर अपीलीय अिधकरण “ए” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI "ी अिमत शु"ला, "याियक सद"य एवं "ी अशवनी तनेजा, लेखा सद"य के सम" । BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA No. : 5639/Mum/2012 (Assessment year: 2006-07) Vs Keshav and Company, ITO –Ward-22(1)(4), B-607, Arihant Bldg., 6th Floor, Sudha Park, Vashi Railway Station, Behind Garodia Nagar, Vashi, Navi Mumbai Ghatkopar (E), Mumbai -400 077 PAN:AACPK 1625 P ""यथ" (Respondent) अपीलाथ" (Appellant) ITO –Ward-22(1)(4), Vs Keshav and Company, Vashi, Navi Mumbai Mumbai -400 07…

Electroplast Engineers, Mumbai vs. ACIT Cir 24(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 5363/MUM/2014[2010-11]Status: DisposedITAT Mumbai02 Nov 2015AY 2010-11

Bench: Shri D. Karunakara Rao & Shri Amit Shukla

For Appellant: Shri P MurlidharFor Respondent: Shri Neil Philip
Section 143(3)Section 45(4)

…o the decision of Hon’ble Bombay High Court and decision of Karnataka High Court in the case of Gurunath (supra) as relied upon by the CIT(A), it is seen that Full Bench of the Karnataka High Court in the case of CIT vs Dynamic Enterprises, reported in [2013] 359 ITR 83 (Kar)(FB), has distinguished the case of the Bombay High Court on facts and dissented from the decision of its own Court in case of Gurunath Talkies (supra). In this case, the question of law referred for consideration of Full Bench was as under:- “When a retiring partner takes only the money towards the value of his share, whether the firm should…