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TMI Blog1972 (7) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ving a Burmah Shell agency business and also a bus service. During the previous year relevant to the assessment year 1964-65 it was found by the Gift-tax Officer that 60 per cent. of the goodwill in Burmah Shell agency and 35 per cent. of the goodwill in the bus service were gifted by the assessee to his brothers. The value of the goodwill of the Burmah Shell agency business which was gifted was determined at Rs. 34,200 and the value of the goodwill of the bus service gifted was determined at Rs. 10,500. After allowing the statutory exemption the Gift-tax Officer taxed Rs. 39,700 as gift. It was contended before him that the gift was exempt under section 5(1)(xiv) of the Gift-tax Act. But this contention was negatived by the Gift-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, profession or vocation ......" To attract the benefit of this exemption, two conditions have to be satisfied. The first is that the gift has to be in the course of carrying on a business, profession or vocation. The second is that the gift should have been made bona fide for the purpose of such business, profession or vocation. To satisfy the first condition, namely, the gift should be in the course of carrying on a business, profession or vocation, it must be shown that the transaction of the gift has some integral connection or relation with the business and to satisfy the second condition it must be established that the object of making the gift should relate to the business. A mere conversion of a proprietary business into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in business. The inclusion of two minor brothers into one of the partnerships was relied on by the department to show that this case is not different from the cases which came up for decision before this court as well as the Supreme Court. As rightly pointed out by the Tribunal, this does not in any way detract from the two conditions satisfied in this case to make the gift exempt from taxation. So, in this case, the two conditions required under section 5(1)(xiv) of the Gift-tax Act are clearly established and, therefore, the Tribunal was right in holding that this gift is exempt from taxation under section 5(1)(xiv) of the Act. In the light of our conclusion, we hold that this gift is exempted under section 5(1)(xiv) of the Act from bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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