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TMI Blog1972 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(xiv) of the Gift-tax Act, 1958 ? " The reference relates to the assessment year 1961-62, the relevant account year being the financial year ending on March 31, 1961. The assessee was the sole proprietor of Kulathungal Motor Corporation which was dealing in motor spare parts and was also having agency in Tata-Mercedes-Benz trucks. On April 1, 1960, the proprietary concern was converted into a partnership, the assessee admitting his two sons also as partners giving to each of them 25% share in the partnership and the assessee retaining to himself 50% share therein. The deed of partnership is annexure " B ". The Gift-tax Officer held that the value of the right including the goodwill of the business gifted is Rs. 45,623 and assessed the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion reached by the Tribunal. The question of exemption claimed by the assessee has no doubt to be considered in the light of the decisions of the Supreme Court in Commissioner of Gift-tax v. Dr. George Kuruvilla and Commissioner of Gift-tax v. P. Gheevarghese, Travancore Timbers & Products, Kottayam. The decisions of this court in Commissioner of Gift-tax v. Ganapathy Moothan, Commissioner of Gift-tax, v. R. Narasimhan Potti, Alleppey and Commissioner of Gift-tax v. Late M. Sankaran Nair relied on by the revenue only follow the principles stated in the decisions of the Supreme Court. The decisions of the Supreme Court do not lay down any dogmatic rule to decide whether in a given case section 5(1)(xiv) of the Gift-tax Act will be at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only the running of the business or its administration but also measures for the preservation of the business, protection of its assets and property. It may legitimately comprehend many other acts incidental to the carrying on of the business. " The reason for reversing the decision of this court in Commissioner of Gift-tax v. Dr. George Kuruvilla by the Supreme Court was that their Lordships construed the deed of partnership as indicating an intention of the assessee to take his daughters into the firm with the object of conferring benefit on them for their advancement. The question will, therefore, ultimately depend on the terms of the document. The preamble of annexure " B " reads : "WHEREAS the first party was carrying on the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Ernakulam where the business was being conducted. It is not possible to construe the requirements in clause (xiv) of section 5(1) as completely independent of each other. They overlap each other to some extent. We are satisfied, on a reading of annexure " B " and examining the circumstances, that the view taken by the Tribunal that section 5(1)(xiv) is attracted is correct and has only to be upheld. We, therefore, answer the question in the affirmative, that is, in favour of the assessee and against the department. We make no order as to costs.
A copy of this judgment will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench, under the seal of this court and the signature of the Registrar X X X X Extracts X X X X X X X X Extracts X X X X
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