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TMI Blog2014 (10) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the gift tax is only with reference to the house property – following the decision in CIT vs. Keshavlal lallubhai patel [1964 (11) TMI 9 - SUPREME Court] - it is difficult to infer that any transaction, similar to the one of gift, has taken place when the mother of the applicant became the absolute owner as a process of adjustment of shares between herself and her sons - what becomes clear is that a gift, as defined under Section 2 (xii) of the Act, which is fairly wider than the description of gift under Section 122 of the Transfer of Property Act, can be said to have taken place if only there is a valid and legal disposition. A firm is not a recognised legal personality and no partner can hold any item of the assets, exclusively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 16,230/-. Through a deed of partnership, dated 07.04.1986, the mother and two sons constituted a partnership firm and the two properties referred to above were made the assets of the firm. However, the firm was dissolved within one year i.e. on 02.03.1987. At the time of dissolution, the building at Nizamabad was allotted towards the share of the mother, open land to the share of one of the sons, by name Arjun Das, and the applicant herein was allotted some liquid assets. In the income tax returns submitted for the assessment year 1987-88, the value of the building was shown at ₹ 6,21,000/-. While processing the returns, the Income Tax Officer, who also happens to be the authority under the Act, took the view that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether on the facts and in the circumstances of the case the Tribunal is correct in its conclusion that upon the dissolution of the firm Arjundas Rajkumar there is deemed gift by the assessee in favour of his mother ignoring the family settlement altogether and in assessing the deemed gift at ₹ 4,69,250/-? Whether on the facts and in the circumstances of the case for the purpose of assessing the deemed gift the valuation of the property at Nizamabad at ₹ 20,28,750/- is correct or whether the same is exclusive? Whether on the facts and in the circumstances of the case while valuing the property on rental method, is the assessee entitled to deduction of Municipal taxes repairs and collection charges from the annual rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urally, a transaction of gift comes into existence. He contends that though the applicant was not clear as to the manner in which the property had been passed on to the mother, he ultimately admitted that the transaction has taken place at the time of dissolution of the partnership firm and that the view taken by the Tribunal accords with law. He submits that none of the questions referred to this Court have any relevance to the issue, much less to the relevant provisions of law and accordingly, they deserve to be answered against the applicant. As mentioned earlier, two items of property were held by the members of the same family. While the building was held by the mother and the sons in equal shares, the open space was in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. The question as to whether any act of transfer in one of the five known methods, i.e. sale, mortgage, gift, lease and exchange can be said to have taken place in a partition within a family or between co-owners. This aspect was considered in detail by the Honble Supreme Court in CIT Vs. KESHAVLAL LALLUBHAI PATEL (1965) 55 ITR 637 (SC). The Supreme Court held as under: Partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in severalty. Each one of the sharers had an antecedent title, and, therefore, no conveyance is involved in the process, as a conferment of a new title is not necessary. Support to this was drawn from the judgment of the Madras High Court in STREMANN (M.K.) Vs. CIT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have taken place if only there is a valid and legal disposition. Section 2 (xii) of the Act reads 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 moneys worth, and includes the transfer or conversion of any property referred to in Section 4, deemed to be a gift under that Section. The word disposition takes in its fold, various categories of transfers. A valid transfer, particularly one of gift, can take place if only the person, who is said to have gifted the property, namely, the donor, had a valid, clear, definite and undisputed title vis-a-vis the property. When a gift is said to have been made by a member of a joint fam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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