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TMI Blog2002 (8) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... e. - - - - - Dated:- 27-8-2002 - Judge(s) : R. JAYASIMHA BABU., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by R. JAYASIMHA BABU J. - Three questions have been referred to us at the instance of the assessee. They are: "1. Whether, on the facts and in the circumstances of the case, a firm is liable to be assessed as a taxable entity under the Gift-tax Act, 1958? 2. Whether, on the facts and in the circumstances of the case, there was a gift made under the provisions of the Gift-tax Act? 3. If the answer to the second question is in the affirmative, whether it is exempt under section 5(1)(xiv) of the Gift-tax Act?" The assessment year is 1978-79. The assessee, a firm, was initially constituted und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of CIT v. Bharani Pictures [1981] 129 ITR 244. The court rejected the contention that the definition of the word "person" in section 2(xviii) of the Gift-tax Act does not take within its fold a firm, as firm is not referred to therein. The court referred to the decision of the Supreme Court in the case of Dulichand Laxminarayan v. CIT [1956] 29 ITR 535, wherein it was held that the firm is certainly an association or body of individuals. Section 2(xviii) of the Gift-tax Act defines a "person" as including a Hindu undivided family or a company or an association or a body of individuals or persons, whether incorporated or not. The firm, being a body of individuals, is clearly covered by this definition. A view similar to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be brought to tax under section 3 which imposes the charge of gift-tax. The answer to the second question has to be and is in favour of the Revenue and against the assessee. Section 5(1)(xiv) of the Act as it stood at the relevant time exempted gift made "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". This clause contemplates a running business making gifts in the course of the conduct of such business to others for the purpose of its own business, and such gifts being made bona fide. That provision has no application to a gift of the business itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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