TMI Blog1972 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... as been referred under section 26(1) of the Gift-tax Act, 1958, is : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the gift in question was exempt under section 5(1)(xiv) of the Gift-tax Act (hereinafter called the Act ") ? " The assessee was carrying on business in paper, hardware, chemicals, cycles, etc., as a sole proprietor. He took his three major sons as partners and admitted a minor son to the benefits of the partnership and a partnership deed was executed on March 4, 1957. The assessee and his sons including the minor son were each entitled to 1/5th share in the profits of the business and the assessee and his three major sons were liable to share the losses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be charged under this Act in respect of gifts made by any person -....... (xiv) in the course of carrying on a business, profession or vocation, to the extent to which the gift is proved to the satisfaction of the Gift-tax Officer to have been made bona fide for the purpose of such business, profession or vocation." The scope of this provision came up for consideration by the Supreme Court in Commissioner of Gift-tax v. P. Gheevarghese, Travancore Timbers and Products. It was held therein that in order to invoke the benefit of the provision it should be proved that the gift was made not only " in the course of carrying on the business, profession or vocation ", but also " bona fide for the purpose of such business, profession or voca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eping good health he is desirous of associating his sons also in his business. This statement was taken to mean that the assessee was not keeping good health and, therefore, could not engage in the business effectively. Even assuming so, the persons who were admitted as partners are not only the major sons but also the minor son of the assessee. There is no evidence that the major sons or any of them had any specialised knowledge or business experience so as to be able to assist the assessee in the development and management of the business. The fact that the business was running at a loss prior to the partnership and was earning profit subsequent to the partnership was relied on by the assessee in this connection. But making of profit or s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
