Judgment :- 1. The question referred to us by the Income Tax Appellate Tribunal, Cochin Bench is in these terms: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the capital gains derived by the assessee on relinquishment of his share in Malabar Fisheries Co. is exempt under S.47(ii) of the Income Tax Act, 1961?" 2. The Year of assessment is 1963-64. The assessee was a partner in the firm Messrs. Malabar Fisheries Company. There were three other partners. The assessment for the year against the assessee was completed on 9-4-1964 taking his share income from the firm as his income. The firm was dissolved on 31-3-1963. On that dissolution three of the partners took over the assets of the firm and the assessee was paid in lieu of his share in the assets of the firm Rs. 3,81,082/-. The Income Tax Officer found that the amount paid to the assessee as his share in the assets of the firm was in excess of the amounts to his credit in the capital and current account of the firm, and his share in the reserve credit in the firm, by a sum of Rs. 43,673/-. On the basis that this income has escaped assessment, the Income Tax Officer reopened the assessment under S.47. In the return filed by the assessee in response to the notice under S.148, the assessee only stated his income at the original figure of Rs. 1,86,265/-, as according to the assessee the amount paid to the assessee, Rs. 3,81,082/-, was not anything other than a distribution of capital asset as envisaged by S.47(ii) of the Income Tax Act, 1961. This stand of the assessee was not accepted and so the sum of Rs.43,673/- Was treated as income of the assessee. In appeal the Appellate Assistant Commissioner however upheld the contention of the assessee and held that the exemption under S.47 (ii) was available to him and this view of the Appellate Assistant Commissioner was accepted by the Tribunal. So the question is whether this view is correct. S.47(ii) is in these terms: "Nothing contained in S.45 shall apply to the following transfers (i) (ii) any distribution of capital asset on the dissolution of a firm, body of individuals or other association of persons;" 3. So the question is whether this view is correct. S.47(ii) is in these terms: "Nothing contained in S.45 shall apply to the following transfers (i) (ii) any distribution of capital asset on the dissolution of a firm, body of individuals or other association of persons;" 3. Counsel for the revenue invited our attention to the decision of the Supreme Court in James Anderson v. Commissioner of Income-Tax ((1960) 39 ITR. 123). Counsel also very fairly drew our attention to the later decision of the Supreme Court in Commissioner of Income-tax v. Sankey Lal Vaiyda ((1971) 79 ITR. 594) where the scope of the decision in James Anderson v. Commissioner of Income tax ((1960) 39 ITR. 123) has been considered. It is clear from the decision in Commissioner of Income tax v. Sankey Lal Vaidya ((1971) 79 ITR-594) that a distribution of money in lieu of capital assets, which may be, due to a partner on dissolution of a firm, is nothing other than a distribution of capital assets on the dissolution of the firm. The question that has been referred to us must, therefore, be answered in the affirmative, i. e., in favour of the assessee and against the department. We do so. The assessee will have bis costs including counsel's fee of Rs. 250/-. A copy of this judgment shall be sent under the seal of this Court and the signature of the Registrar to the Appellate Tribunal.