9911796707
TMI Blog1981 (10) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... s. For the asst. yr. 1976-77, there was a change in the constitution as evidenced by deed dt. 5th December, 1975 on the demise of Hardwari Mal. The Constitution of the firm for the asst. yr. 1976-77 was, therefore, as under after the demise of Shri Hardwari Mal: (1) Tuhi Ram 25% (2) Ganga Ram 25% (3) Roshan Lal 25% (4) Smt. Chander Pati Devi 25% 3. Shri Hardwari Mal was the patriarch of the family. His wife Smt. Chander Pati Devi has been admitted as a partner in the asst. yr. 1976-77 after his demise. They had five sons, namely, Tuhi Ram, Ganga Ram, Ram Niwas, Roshan Lal and Suresh Kumar, Smt. Pisto Devi. Smt. Chameli Devi, Smt. Gayatri Devi and Smt. Parwati Devi were respectively the wives of Tuhi Ram, Ganga Ram, Ram Niwas a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 450 Parwati Devi 850 Laxmi Narain 400 . 2,918 The AAC for the asst. yr. 1976-77 went in detail into the question of the gifts made and the reasonableness and held that the gifts were invalid because they were not of reasonable amounts. He confirmed the disallowance. Hence the first issue that we have to decide in these appeals is whether disallowance of interest in both the years under appeal is justified or not. 7. We have very carefully considered the rival submissions and we find that the gifts firstly cannot be called cross gifts. The gifts are as under: " Name of the Name of the donee Amount Date of Gift donor . of Gift . Hardwari Mal (HUF) Roshan Lal s/o Shri Hardwari Mal 5,000 29th March, 1972 Tuhi Ram (HUF) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in so far as Smt. Gayatri Devi is concerned, she has also received the gifts and deposited the said amount with the firm yet the interest paid to her was not disallowed either by the ITO or by the AAC. He also contended that the ITO worked under misunderstanding that Roshan Lal was a partner of the firm for the asst. yr. 1975-76 when in fact he was not. Relying on the judgment of the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Daljit Singh (1980) 15 CTR (P&H) 260, the ld. Counsel for the assessee submitted that the gifts made on account of love and affection are not void and even if they are of excessive amounts or are not given for love and affection, these are only voidable and can be challenged only by the sons and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders of the authorities below on this ground and direct the interest payment to be allowed as claimed. 8. The only other issue that requires our consideration for the asst. yr. 1975-76 is the question of exigibility of the amount of Rs. 1,392 representing dharmada collections by the assessee. After hearing the parties, we are of the opinion that this issue is squarely covered in favour of the assessee by the ratio decidenti of the judgment in the case Bijli Cotton Mills (1979) 116 ITR 60 (SC). In view of this, the appeal of the assessee for the asst. yr. 1975-76 succeeds entirely. 9. For the asst. yr. 1976-77, ground Nos. 3, 4, 5, 6, and 7 relate to the disallowance of interest of Rs. 2,918. In view of our decision above, this interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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