TMI Blog2000 (9) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... artners within the meaning of "transfer of property" for the purposes of the Gift-tax Act or that there was a gift liable to gift-tax. The word "settlement" in the definition of "transfer of property" in the Gift-tax Act takes colour from the context of the definition and its neighbouring words and means a settlement upon trust and not a settlement of accounts. Therefore, that the view taken by the Appellate Assistant Commissioner, the Tribunal and the High Court was the right view. Appeal dismissed. - - - - - Dated:- 20-9-2000 - Judge(s) : S. P. BHARUCHA., S. N. PHUKAN., Y. K. SABHARWAL JUDGMENT The judgment of the court was delivered by S. P. BHARUCHA J.---The High Court of Kerala (see [1989] 180 ITR 257), answered in the aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there was no element of transfer of interest by the retiring partner to the continuing partners. From out of the order of the Tribunal, the question, quoted above, was posed to the High Court. The High Court took much the same view as that taken by the Tribunal. The learned Attorney-General, appearing for the Revenue, drew our attention to the definitions of "gift" and "transfer of property" in the Gift-tax Act. "Gift" is defined as under : " 'gift' means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth, and includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section. Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there was a gift by him to them thereof. He laid emphasis on the fact that the definition of "transfer of property" included a "settlement" and, in his submission, there was a settlement of accounts here. Our attention was drawn by the learned Attorney-General to the judgment of the Calcutta High Court in CGT v. Nani Gopal Mondal [1984] 150 ITR 469. This was, as is very clear from the following passage, a case of an express gift and, therefore, is of no relevance to the facts of the case before us : "In the instant case, Nani Gopal Mondal by the deed of gift transferred his share or interest in the firm which included his share of goodwill also, Hence, for the purpose of payment of gift-tax, the value of one-third share of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the case at hand, there has been any such transfer of property. To recapitulate, when the assessee retired from the two firms, he received the value of his shares therein and the argument was that what he had received was less than the market value of his shares since the goodwill of the firms had not been taken into account. When a partner retires from a partnership, the partnership continues. The assets and the goodwill of the firm continue to remain the assets and the goodwill of the firm. All that the retiring partner gets is the value of his share in the partnership assets less its liabilities. It cannot, in such circumstances, be held, assuming that the retiring partner received less than what was his due, that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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