P P Menon v/s CIT

Summary• Assessee – P P Menon• Firm dissolved on 15-4-2001• Land & Hospital building acquired by the Assesse• Later sold on 18-4-2001

• Sold for 4012000 Cost of acquisition 1482222 Capital Gain 2529778

Importance

• To identify whether the asset of a partnership firm are the assets of the partners or no.

• Section 49 (1) (iii) (b) - Capital asset which becomes the property of the assesse in the circumstances mentioned in the Act, There shall be included the period for which the asset was held by the previous owner.

• Exception

Decision• The period of holding of the asset by the assesse is from the date of

dissolution of the firm.

• Reasons – • The dissolution of the firm happened after 1st April, 1987• Independent partners have no independent right over the property of the

firm as long as the firm is in existence.

Rule Established• N/A

Thank You