9911796707
TMI Blog2002 (9) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... R. JUDGMENT At the instance of the Revenue the following question of law has been referred to this court under section 26(1) of the Gift-tax Act, 1958, for decision: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no element of gift was involved when the assessee retired from the firm in which he was a partner?" The matter arises under the Gift-tax Act, 1958 (for short "the Act"). The assessment year concerned is 1987-88. The respondent-assessee was a partner in a firm by name M/s. R. Kesava Pillai, Merchants, Quilon. On April 30, 1986, the assessee retired from the said partnership firm and in his place Sri M.C. Thankappan Pillai was admitted as a new partner. The assessee was ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the case on hand. Senior counsel has also relied on another decision of the Supreme Court in B.T. Patil and Sons v. CGT [2001] 247 ITR 588 rendered by the same Bench on the same date and submits that the matter requires a fresh look in the light of the said decision. Sri C. Unnikrishnan, learned counsel appearing for the assessee submits that the principles laid down in both the decisions of the Supreme Court are the same which squarely apply to the facts of the present case and the distinction sought to be made by the Supreme Court in the second decision turns on its own facts. We have already stated the brief facts. The Tribunal has relied on the decision of this court in T.M. Luiz [1989] 180 ITR 257 which held the view that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and this judgment can be of no assistance. The Supreme Court in B.T. Patil's case [2001] 247 ITR 588 (SC) has referred to a passage from the decision in Sunil Siddharthbhai v. CIT [1985] 156 ITR 509, 519 (SC), which reads as follows: "...that when a partner retires or the partnership is dissolved, what the partner receives is his share in the partnership. What is contemplated here is a share of the partner qua the net assets of the partnership firm. On evaluation, that share in a particular case may be realised by the receipt of only one of all the assets. What happens here is that a shared interest in all the assets of the firm is replaced by an exclusive interest in an asset of equal value. That is why it has been held that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excavating tunnels; it had five partners; during the assessment year 1979-80 it transferred certain items of machinery to each of its five partners and debited their accounts with the consideration charged therefor; the aggregate of such consideration came to Rs. 1,26,035; which was the written down value of the machinery in the assessee's books; about three months later, the five partners floated another partnership and brought in the said machinery as their capital contribution thereto, of the value of Rs. 9,48,100; the new partnership firm sold the machinery to another concern for the price of Rs. 10,76,220 ; on these facts, the Gift-tax Officer came to the conclusion that the assessee-firm had made a gift of the machinery to its fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
