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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 ..... ssioner of Gift-tax. Kerala, is the following : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the gift in question was exempt under section 5(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 reta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in Commissioner of Gift-tax v. Dr. George Kuruvilla had been reversed in Commissioner of Gift-tax v. Dr. George Kuruvilla. But, in our view, that circumstance by itself is not sufficient to affect the 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 follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction or relationship with the business. To put it differently, the object in making the gift or the design or intention behind it should be related to the business. " Their Lordships further observed: "It covers not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dominant intention behind the partnership was to promote the business and strengthen the same. Annexure " B " also shows that the assessee at the time was contemplating opening of business in places other than Trivandrum and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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