9911796707
TMI Blog1988 (3) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was a transfer of the assets from which the income arose and, therefore, the provisions of section 60 of the Income-tax Act, 1961, would not apply ? 2. Whether, on the facts and in the circumstances of the case and in view of the contents of the deed of declaration dated February 12, 1977, wherein the donee, who is a minor, had been made liable to share the losses also, the contract for the gift of 1/4th of the holding of the assessee in the firm of M/s. Grandhi Butchi Raju and Company is valid and, consequently, whether there is a valid gift of such portion of the share by the assessee 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that 1/4th of the share of profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he karta. That is how the foundation for the gift was laid. In connection with the income-tax assessment for the year 1977-78, the assessee claimed that the income corresponding to the moiety of share gifted in favour of Venkatalakshmi should be excluded from the assessment of the assessee. A perusal of the assessment order would show that the Income-tax Officer went into the question regarding the status and was satisfied with the averments contained in the declaration of gift that the correct status of the assessee was that of a Hindu undivided family. This was so, because the Income-tax Officer describes the assessee as a " Hindu undivided family (non-specified) ". It is not, therefore, necessary to go into the question whether the gif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly show that the share in the partnership firm continued to be in the name of the assessee, the karta of the joint family, and the minor daughter, Venkatalakshmi, was not made a partner in the partnership firm. Thus, the question of burdening the minor with losses does not arise. Learned standing counsel fairly concedes that as far as the gift is concerned, its validity is not open to question because an onerous gift can always be made and if there is an averment in the gift deed that if in any year loss arises to the minor child, the same shall be recovered from the child, it does not have the effect of making the gift invalid. So, learned standing counsel reiterated the ratio of Ramachar's case L1961] 42 ITR 25 (SC) and stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts on record. The provisions of section 60 can have no application in a case where the corpus itself is transferred. Having regard to the above, question No. 1 is answered in the negative to the effect that the provisions of section 60 of the Income-tax Act, 1961, have no application. Question No. 2 is answered in the affirmative to the effect that there as a valid gift by the assessee in favour of Venkatalakshmi. Finally, question No. 3 is answered in the affirmative to the effect that the share of profits corresponding to the extent of share gifted in favour of Venkatalakshmi cannot be included in the hands of the assessee. In the result, all the three questions are answered in favour of the assessee and against the Revenue. As t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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