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TMI Blog1997 (3) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ss as a hotelier as the sole proprietor on August 1, 1973, and continued up to June 30, 1974. By the partnership deed dated November 12, 1974, the assessee entered into a partnership with Shri Gaj Singh to run the business of hotelier more efficiently with effect from July 1, 1974. The business was to run under the name and style of Umaid. Bhawan Palace, Jodhpur. The assessee contributed towards its capital the immovable property known as Umaid Bhawan Palace along with its running business with effect from July 1, 1974. The immovable property which was brought to the stock of the partnership firm along with the other assets, were taken at its book value of Rs. 50,70,000. The assessee further entered into an agreement with party No. 2, Shri Gaj Singh, on June 10, 1975, and the additional clause was added in the partnership agreement that party No. 2, Shri Gaj Singh, will have no interest in the immovable property, i.e., "Umaid Bhawan Palace" put in the common pool of the partnership and the property will revert back to the assessee at its book value at the time of dissolution of the partnership. This partnership created vide partnership deed dated November 12, 1974, was later on dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case does not amount to a transaction being a device to convert the personal asset into money substantially for the benefit of the assessee while avoiding tax and the essential ingredients laid down under section 4(1)(a) of the Gift-tax Act for the purpose of invoking a "deemed gift" are not satisfied and, therefore, the transfer of Umaid Bhawan Palace by the assessee to the partnership firm does not constitute a "deemed gift" under section 4(1)(a) of the Gift-tax Act. The Revenue, dissatisfied with the order dated January 31, 1986, passed by the Commissioner of Gift-tax (Appeals), jodhpur, filed an appeal before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur. The Tribunal, by its order dated November 5, 1986, dismissed the appeal filed by the Revenue and partly allowed the cross-objections filed by the assessee. The Revenue thereafter moved an application under section 26(1) of the Act to refer the question of law mentioned in the application for the opinion of this court. The Tribunal, vide order dated May 13, 1991, dismissed the application filed by the Revenue and declined to refer the question of law proposed by the Revenue for the opinion of the High Court, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided by the Supreme Court in Sunil Siddharthbhai's case [1985] 156 ITR 509, and as such the reference to the High Court of the question will be only academic and the Tribunal was justified in declining to refer the question to this court. It is also contended by learned counsel for the assessee that even otherwise, the decision of the Tribunal is correct on the question of law and, therefore, the Tribunal was right in declining to refer the case. We have considered the submissions made by learned counsel for the parties. It is true that when the answer to a question is self-evident or where it is concluded by the judgment of the Supreme Court or the judgment of the High Court within whose jurisdiction the Tribunal is situated, then the reference of the question is merely academic and in such circumstances if the Tribunal declined to refer the question then no illegality can be found in the order passed by the Tribunal. But where the question of law does arise out of the order passed by the Tribunal, the reference cannot be declined on the ground that the decision of the Tribunal is correct on the question of law. If a question of law does arise out of the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the written down value of the building "Umaid Bhawan Palace" brought in the stock of the firm by the party of the second part, as his capital contribution. Both the parties have further agreed that whatever additional capital is required from time to time, for carrying on the partnership business shall be contributed by the parties hereto in such proportion and in such terms as they may agree upon from time to time or it may be arranged from outside, as found suitable by the parties." Both the parties to the partnership agreement further agreed on June 10, 1975, that at the time of dissolution of the firm, the immovable property known as "Umaid Bhawan Palace, Jodhpur" along with its fixtures shall be taken over by the first party which was initially brought into the partnership firm. Reading clause 6 of the original agreement of the partnership and the agreement put by way of addenda in the partnership on June 10, 1975, along with the partnership deed raises a question of law to be decided by the High Court. The concept of the partnership creates a joint venture and if for that purpose any immovable property is brought in then it becomes the "trading asset" of the partnership. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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