9911796707
TMI Blog2000 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 she was a partner ?" In R. A. No. 61 of 1998 : " 1. Whether, on the facts and ill 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 she was a partner ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the penalty levied under section 17(1)(a) of the Gift-tax Act, 1958 ?" The facts which gave rise to the above reference are as follows : The assessee, V. Chithra, was a partner of the firm, G. G. Hospital, Trivandrum. She retired fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade. Learned counsel for the Department, Sri Raveendranatha Menon, contended that it is a case where a partner retired from a, partnership. The goodwill was an asset of the firm. The partner was entitled to a share in the goodwill. But the goodwill was parted with without any consideration. According to him, the remaining partners had an advantage in that their shares increased and, hence, there was a transfer of property as per the Gift-tax Act. He submitted that the decision in T. M. Luiz Kannamally's case [1989] 180 ITR 257 (Ker) has been upheld by the Supreme Court in the decision reported in CGT v. T. M. Louiz [2000] 245 ITR 831. But, according to learned counsel, so far as this case is concerned there is some difference in fact. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was that, the assessee was a partner in two firms. The Gift-tax Officer assessed him to gift-tax on the basis that, upon such retirement, there was a gift because the assessee had surrendered his rights in the firms. The assessee appealed and the Appellate Assistant Commissioner held that there was no voluntary act by the assessee and that he had only relinquished his right and interest in the firms, so that there was no gift. Before the Tribunal, it was contended by the Revenue that the amounts taken by the assessee from the firms for his shares therein was less than the market value thereof, since the goodwill of the firm had not been taken into account. There had, therefore, been a relinquishment of his shares, which was a gift. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, there is nothing to show that any amount was paid and so there is a gift. According to us, the statement of facts do not reflect that no amount was received by the assessee with regard to the value of the shares in the firm. The assessment order as well as the statement of facts show that the only question raised was whether for the purpose of goodwill any separate consideration should have been paid by the assessee for the purpose of relinquishment of goodwill. The facts do not show that the retiring partner did not receive any amount for the value of the shares. Hence, we are of the view that facts of this case are covered by the decision of the Supreme Court in T. M. Louiz's case [2000] 245 ITR 831. So far as the decision in B. T. Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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