TMI Blog1981 (2) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... ner and the mutual profit sharing ratios of the three parties were agreed upon to be as follows: 1. Shri Ajit Singh 40 per cent 2. Km. Surendra Gill 20 per cent 3. Shri Harsaran Singh Gill 40 per cent The GTO felt that on account of the change in the constitution of the firm in the aforesaid manner, Shri. Ajit Singh, the respondent had relinquished his right of enjoying share of 35 per cent in favour of the incoming partner and that inasmuch as the relinquishment of the share, according to him, was without adequate consideration, the gift-tax liability was attracted to the respondent s case and accordingly he worked out the goodwill of the firm, which would have been al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... style of partnership was changed to M/s. Ajit Industries. Shri Harsaran Singh was an energetic and young man and was capable of performing and supervising the sugar industries very well. The assessee was an old man and was holding after a young and deshing energetic man, who could look after property and the management of the partnership business in right earnest. Shri Harsaran apart from being young, energetic and well versed in sugar industries business, had, as stated above, the credit balance in his account of Rs. 71,162.24. He was no more willing to remain employed his funds if he was not given share in the partnership business. The withdrawal of such huge amount from the partnership business could have rendered severe blow to the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied in support of his proposition in the following decisions: 1. CGT vs. Ganapathy Moothan(1972) 84 ITR 758 (Ker) 2. CGT vs. A.M. Rehman Rowther (1973) 59 ITR 219 (Mad). 3. CED vs. Smt. Laxmi Bai (1980) 17 CTR (All) 84 : (1980) 126 ITR 73 (All) 5. On behalf of the assessee, the order of the ld. AAC is stoutly supported and the same plans as were put up before him for consideration by the respondent were put forward before us also. The ld. counsel placed reliance for the stand taken by him that, on the facts and in the circumstances of the case, no gift at all was made out, on the following decisions : 1. CGT vs. Chhotalal Mohan Lal (1974) 97 ITR 393 (Guj) 2. CGT vs. Sardar Wazir (1975) 99 ITR 104 (All) 3. Ramniklal Chhotal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han (1972) 84 ITR 758 (Ker) and that of Abdul Rehman Rowther (1973) 89 ITR 219, the assessee were sole proprietors of the respective businesses and the bringing in of the sons and daughters into the firm was not shown to have been on account of adequate consideration. It is, however, not the position in the present case. Here as we have seen the incoming partner has brought in not only his experience and energy for the benefit of the firm but also capital of Rs. 70,000 and, therefore, the facts of the present case appear to us to be more akin to those obtaining in the case of Sardar Wazir Singh (1975) 99 ITR 104 (All) wherein also new partners had contributed capital and they were admitted into the partnership on account of business conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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