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TMI Blog1988 (9) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said partners by, partnership deed dated August 2, 1962, amounts to a gift and thereby upholding the inclusion by the Assistant Controller of Estate Duty of the entire difference between the market value and the book value of the assets of the firm, Korangani and Azizbagh Tea Estate, amounting to Rs. 6,45,459 dutiable as part of the estate of Shri J. P. Chaliha, the deceased, under sections 5 and 10 of the Estate Duty Act, 1953 ? The reference relates to the estate of Jadav Prasad Chaliha. He was planter-manufacturer and a tea merchant. He was the sole proprietor of business styled as Korangani and Azizbagh Tea Estate. He converted the sole proprietary business into a partnership business on August 2, 1962. In that firm, his two s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree partners were donees" is the first question that arises in the case. We see Ranjit had agreed to devote his entire time to the business of the firm. Indrajit and Debabala agreed to devote attention to the work of the partnership firm as was required of them to do. Whether these factors form consideration ? If so, it is obvious, there is no gift under the laws of the country. The cases in CGT v. Karnaji Lumbaji [1969] 74 ITR 343 (Guj) and Addl. CGT v. A. A. Annamalai Nadar [1978] 113 ITR 574 (Mad) were cited on behalf of the accountable person to support the contention. It is seen in the latter case that the major son was taken as a partner of, the firm by the aged father. The major son agreed to render service and that agreement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the other in Clifford John Chick v. Commr. of Stamp Duties [1959] 37 ITR (ED) 89;[1958] AC 435 were followed for many years by the courts in India. A significant departure was made in the case of CED v. C. R. Ramachandra Gounder [1973] 88 ITR 448 (SC). After a gift was made and the donees invested the gifted property in the partnership, the Supreme Court held that section 10 aid not apply. If the Privy Council cases were to be followed, the decision and conclusion would have been different in Gounder's case [1973] 88 ITR 448 (SC) and that case was followed in CED v. Ramarathnam [1973] 91 ITR 1 (SC), CED v. Kamlavati and Jai Gopal Mehra [1979] 120 ITR 456 (SC) and CED v. Godavari Bai [1986] 158 ITR 683 (SC). All these cases are referred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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