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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 ..... and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the gift is exempt under section 5(1)(xiv) of the Gift-tax Act, 1958 ? " The facts are as follows : The assessee was having 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 statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ....... (xiv) in the course of carrying on a business, profession or vocation, to the extent to which the gift is proved to the satisfaction of the Gift-tax Officer to have been made bona fide for the purpose of such 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 inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness. The two partnerships were actually managed by the brothers and it was found by the Tribunal that it was in the interest of the business that the partnership was formed for both businesses considering the increase 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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