2002 (8) TMI 96

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..... to us at the instance of the assessee. They are: "1. Whether, on the facts and in the circumstances of the case, a firm is liable to be assessed as a taxable entity under the Gift-tax Act, 1958? 2. Whether, on the facts and in the circumstances of the case, there was a gift made under the provisions of the Gift-tax Act? 3. If the answer to the second question is in the affirmative, whether it .....

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..... hough the agreement mentioned that the excess of the assets over liabilities of that firm as on the date of transfer would be paid over to the firm, no proof of such payment was at any time produced by the assessee. The amounts borrowed by the firm from the company were not treated as consideration for the transfer and that amount continued to be shown as outstanding and due by the firm to the com .....

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..... ITR 535, wherein it was held that the firm is certainly an association or body of individuals. Section 2(xviii) of the Gift-tax Act defines a "person" as including a Hindu undivided family or a company or an association or a body of individuals or persons, whether incorporated or not. The firm, being a body of individuals, is clearly covered by this definition. A view similar to the one taken by .....

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..... the case of the assessee that what was transferred did not have a value. A valuable running business having been transferred for no consideration at all, it clearly amounted to a gift and the tax levied thereon under the provisions of the Gift tax Act was perfectly proper. "Gift" is defined in section 2(xii) of the Gift tax Act as meaning a transfer by one person to another of any existing movabl .....

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..... mplates a running business making gifts in the course of the conduct of such business to others for the purpose of its own business, and such gifts being made bona fide. That provision has no application to a gift of the business itself, which is what the assessee has done in this case. The Tribunal has rightly held that, that gift is not exempted under section 5(1)(xiv) of the Gift-tax Act. We, t .....

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