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TMI Blog2002 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... he hearing before the Tribunal. In view of the above request, we have taken up the reference for hearing today since the reference is pending since 1994 and the controversy is concluded by a reported decision. In this reference at the instance of the Revenue, the following question is referred for our opinion in respect of the assessment year 1980-81: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that there was no gift by the assessee in favour of the two partners of the firm whose shares had increased after the retirement of the assessee?" We have heard Mr. Tanvish Bhatt, learned standing counsel for the applicant-Revenue. Though served, none appears for the respondent-assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d had also contributed fresh capital. The Tribunal, therefore, accepted the assessee's contention that there was consideration and, therefore, there was no gift. The Tribunal distinguished the decision of the Supreme Court in Chhotalal Mohanlal's case [1987] 166 ITR 124, since that was a case of minors being admitted to the benefits of the partnership and, hence, there could not be any question of their sharing losses. Hence, this reference at the instance of the Revenue. At the hearing today, our attention is invited to the decision of the apex court in CGT v. T. M. Louiz [2000] 245 ITR 831 and also the decision dated September 25, 2001, of this court in Gift-tax Reference No.2 of 1987 (CGT v. Arunbhai Hargovandas Patel [2003] 264 ITR 586 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The profit-sharing ratio in a firm can vary for a number of reasons, among them the ability of the partners to devote time to the business of the firm. The gift of a part of a partner's share to another has to be established by relevant evidence and the onus of doing so is on the Revenue. In the facts of the present case, the two partners whose share was increased had not only agreed to share their losses but had also brought fresh capital when the assessee retired from the partnership firm. In the background of these facts, the aforesaid decision of the apex court in D. C. Shah's case [2001] 249 ITR 518 is clearly applicable and, therefore, the Tribunal was justified in taking the view that there was no gift made by the assessee in f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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