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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 ..... ned a building at Nizamabad. In addition to that, the two brothers held an open land at Nizamabad in common. The building was leased to the State Bank of India at monthly rent of Rs. 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 bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect to family settlement, is relevant for understanding whether at all, there is any transfer resulting in a deemed gift under the Gift Tax Act? 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 Rs. 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 Rs. 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that the very formation of a partnership firm was an exercise to bring about, a transfer without consideration and naturally, 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h would depend upon the relevant circumstances, such as location of the property, needs of the concerned partner, 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 ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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