TMI Blog2002 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case, the Tribunal was justified in law in holding that there was no nucleus of the partnership property in the impugned sum of Rs. 18,32,426 brought into the books of the firm on March 31, 1973, when the said sum was earned by the firm during which the assessee was a partner in the firm?" Before we proceed any further we make it clear that in the last part of the second question the word "which" should be struck out and after the word "during" the words "the period when" should be inserted. The facts which have given rise to these questions are briefly as follows Up to March 31, 1972, there were four partners of the firm, Amirchand Payarelal, of whom two were Surendra Paul and Swaraj Paul. With the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The finding of the Gift-tax Officer was reversed in appeal. The appellate officer records that for reasons not exactly ascertainable by him, in spite of his best efforts, the said sum of Rs. 18,00,000 and odd never found its way into the books of the firm up to March 31, 1972. Apparently, this was interest income for the periods prior thereto. For such prior periods, the appellate authority recorded, that income-tax dues of the firm were in arrears for a long time and huge amounts were paid at one time covering long periods. We need not inquire into whether the payment of large amounts also implied leaving unpaid of large amounts but we cannot say that the thought has not crossed our mind. To come back to the main issue, the appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of the firm of Amirchand Payarelal on March 31, 1973, that does not mean that the revenue got any cause of action to assess the deemed gift in the assessment year 1973-74." A number of cases were cited by both sides. In regard to the main issue, i.e, whether, in the facts and circumstances of this case, a case of gift can at all be made out, the case of CGT v. T.M. Louiz was relied on on behalf of the assessee. It is reported at [2000] 245 ITR 831 (SC) equivalent to AIR 2000 SC 3136. The Supreme Court there was of the opinion that in the case of a retiring partner, the assets and the goodwill of the firm did not attract gift-tax by being a transfer by way of settlement within the meaning of the Transfer of Property Act. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent, i.e., the giving up taking place on March 31, 1972, and the taking thereof taking place on April 1, 1973, there is no problem. No gift is complete until taken. As such the correct previous year for gift-tax would be 1972-73 corresponding to the assessment year 1973-74. As regards the Hindu undivided family, karta being unable to make a gift to some members of the very same Hindu undivided family, some cases were cited to us to which we do not have to make any detailed reference. It is not possible in our opinion for a particular assessee even if he describes himself as a karta of a Hindu undivided family, to be an assessee, and a partner, and to be a distinct legal personality for these purposes, and yet to cease to be such a distin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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