TMI Blog1976 (9) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ng questions of law have been referred to this court: T.C. No. 427 of 1971 "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was not liable to pay gift-tax when his share in the partnership-firm was reduced from 44 per cent. to 20 per cent. as a result of the reconstitution of the firm, by which the four sons of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reconstitution of the firm, the share of Palaniappa Mudaliar concerned in T.C. No. 427 of 1971 was reduced from 44 per cent. to 20 per cent. Similarly, the share of Swaminatha Mudaliar concerned in T.C. No. 3 of 1972 was reduced from 56 per cent. to 25 per cent. The Gift-tax Officer considered that the reduction in the share of the respective assessees was liable to be taxed under the Gift-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv) of the Gift-tax Act. The department appealed to the Tribunal in each of these cases. The Tribunal held that there was no element of gift involved in the reduction of the respective assessee's share as a result of the admission of the other persons. The Tribunal has recorded a finding which runs as follows: "In the instant case (T.C. No. 427 of 1971), the five sons of the assessee have each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umber of branches has increased from 11 to 35. The sons of the assessee, who were newly admitted to the partnership, attended to the business of the firm and they shared in the liabilities of the firm and the future losses. In the circumstances, the relinquishment or transfer of the assessee's share of 24 np. in the partnership in favour of his sons is not without consideration in money or money's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding of the existence of consideration in money or money's worth it would follow that there is no gift. We have ourselves looked into the partnership deed in which it is clearly stated that the new partners were being taken for the purpose of expansion of business and for the purpose of getting fresh financial resources. The finding of the Tribunal is, therefore, borne out by materials. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
