9911796707
TMI Blog1968 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... rtition, the terms of which are found in the partition deed. The assessee retained Rs. 70,000 in cash with him and the balance of the family assets was allotted to the share of the minor son. The responsibility for bringing up the assessee's four daughters and performing their marriages in accordance with the custom of the community and the status of the family was left with the minor son. Though the assessee retained for himself the sum of Rs. 70,000, he undertook to discharge a registered mortgage due from the family, a sum of Rs. 20,000. The partition appears to have been recognised for purposes of income-tax under section 25A of the Income-tax Act, 1922. For the assessment year 1959-60, the assessee filed a, "nil return" for purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts it could not be held that the transaction was one without consideration inasmuch as the responsibility for maintaining and performing the marriages of his sisters lay on the minor under the terms of the partition. In the circumstances, at the instance of the Commissioner, the reference comes before us, the question for our consideration being : "(1) Whether, on the facts and in the circumstances of the case, the assessee was liable to gift-tax? (2) If the answer to the first question is in the affirmative, whether the sum of Rs. 3,61,300 representing the value of the immovable properties in Malaya is exempt from taxation under section 5(1) of the Gift-tax Act?" On the strength of A. Narayanappa v. B. Krishnappa, the department conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formed part of the trading assets of the business by the other partner. The document was not registered and the question before the Supreme Court pertained to the validity of the document. It was held that the document did not require registration. The court observed : "The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is done, whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership. The person who brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was, therefore, that share owned by the family in the foreign firms, and not the immovable properties per se which constituted the business assets of those firms. We are of opinion, therefore, that section 5(1) had no application and the allowance granted in respect of the immovable properties of the value of Rs. 3,61,300 cannot be sustained. That, by itself, may not conclude in favour of the revenue which has got to get over another hurdle. The next question will be whether the partition deed, having regard to its entire tenor and effect, amounted to a transfer of the assessee's half share. A related question was considered by Commissioner of Income-tax v. Getti Chettiar, to which one of us was a party. That was a case of a joint Hindu f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is nothing in the partition deed to show that there has been a division first, later on a kind of notional division by metes and bounds and, thereafter, the father transferring his half share after retention of a portion. As a matter of fact, the partition deed itself says : "Having valued my share and obtained in cash and having partitioned the entire assets to my minor son, Karuppan Chettiar, myself and my minor son, Karuppan Chettiar, have become divided in status." The division in status is, therefore, contemporaneous with the division of the family assets. It seems to us, therefore, that there is hardly any room for holding that Commissioner of Income-tax v. Getti Chettiar is inapplicable. We answer the first question against the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
