9911796707
TMI Blog1980 (6) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... places under the name and style, M/s. N.S. Panicker Co., under a deed 1st April, 1969. Cl. 7 of the said deed provided that the books of account of the firm should be closed on the last day of each financial year and the profit or loss, as the case may be, should be shared equally between them. Cl. 3 provided that a partnership could be terminated at the will of the parties. The partnership acquired various assets, namely, building, motor car, air-conditioner, cycle, furniture, electric fittings, typewriter etc. It appears that Shri N. Sankara Panicker had advanced moneys for the acquisition of these assets and he was given credit therefor in the account of the firm. As on 31st March, 1975, the credit balance in his account was Rs. 64,51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee, as a result of which his credit balance became reduced to Rs. 19,753.78. 3. In response to the notice issued under s. 13(2) of the Gift-tax Act, the assessee filed a return on 1st Dec., 1977 claiming that there was no gift involved in the transaction of the dissolution of the partnership. The alternate contention taken was that even if there was any gift it was exempt from tax under s. 5(xiv) of the Gift-tax Act, on the ground that such gift was one made in the course of carrying on of a profession and bona fide for the purpose thereof. The Gift-tax Officer rejected both the contentions. He held that the assessee was entitled to 50 per cent of the assets and, in so far as, he had not been paid the value thereof there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to him as per the deed of dissolution could not be added as the same was already reflected in the value of the movable and immovable assets in the balance-sheet. Hence this appeal by the assessee. 5. It was strenuously contended by the assessee's authorised representative that in view of the agreement arrived at between the parties there was no gift involved in the transaction. The above contention appears to be correct. It is to be noticed that Shri N. Sankara Panicker had advanced moneys for the acquisition of the assets and hence his account was duly credited therefor. As on 31st March, 1975 there was a credit balance of Rs. 64,516.54 in his account. The credit balance in the assessee's account as on that date was Rs. 24,935.99. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the goodwill of the firm should be taken over by the first party, that so to say, Shri N. Sankara Panicker. Therefore, it is not possible to accept the contention that the firm had no goodwill. 7. Still the next question to be considered is whether the assessee could be said to have gifted his share of the goodwill. If the assessee had not received any consideration for his share of the goodwill, there could be no doubt that he had made a gift of it. Shri Rangamani contended that the assessee had bee allotted files which were expected to fetch an annual income of Rs. 55,000 and that was sufficient consideration for assessee's giving up his share of the goodwill. It was stated that the files allotted to the assessee represented above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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