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TMI Blog1985 (10) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Tribunal was justified in setting aside the order of the Gift-tax Officer with regard to the point of gift made to the minor sons of the assessee ? " Up to the assessment year 1970-71, the assessee, Mannalal Surana, was the proprietor of M/s. Hazarimal Milap Chand, Jaipur (hereinafter referred to as the " assessee "). He was assessed in the status of an individual. He observed the Diwali year as his accounting year. On Diwali, 1970, i.e., November 9, 1970, he converted his personal business run in the name and style of M/s. Hazarimal Milap Chand into a partnership concern by taking his major son, Nirmal Kumar, as working partner and admitting his two minor sons, Vimal Kumar and Narendra Kumar, to the benefits of the partnership. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in the line of business, it was wrong on the part of the assessee to say that Nirmal Kumar was admitted into the partnership with a view to expand the business activity and because the assessee was keeping ill health and, therefore, all the three sons were taken as partners without any consideration and thus he found that by forming a partnership and relinquishing 90% share in favour of his three sons, the assessee has made a gift within the meaning of section 4 of the Act. The assessee went in appeal and the Commissioner of Income-tax (Appeals), Jaipur, dismissed the appeal by his order dated August 29, 1979. The assessee preferred further appeal before the Income-tax Appellate Tribunal which accepted the appeal as it came to a findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to decide about the alleged relinquishment of 60% share in favour of the two minor sons and the parties were given liberty to produce evidence in support of their contentions. The Commissioner of Gift-tax moved an application before the Income-tax Appellate Tribunal requiring the Tribunal to draw up a statement of case and refer the above questions of law for the opinion of this court but the Tribunal rejected the said application and, hence, the present application has been filed before this court under section 26(3) of the Act. The said application was admitted and notice was issued to the assessee. We have heard learned counsel for the Revenue as well as for the assessee and also perused the records of the case. The Income-tax App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inor sons, are concerned, their position was different from that of Nirmal Kumar. According to the partnership, they have not contributed any capital and also did not render any service and they were not required to bear the losses and relying on Addl. CGT v. A. A. Annamalai Nadar [1978] 113 ITR 574 (Mad), the Tribunal came to the conclusion that there is no transfer of asset as such in favour of the minor sons. Therefore, it remanded the case to the Gift-tax Officer to decide about the alleged relinquishment of 60% share in favour of the two minor sons in accordance with law after giving an opportunity to the parties to lead any further evidence if they wanted. Learned counsel for the Revenue could not justify that the view taken by the T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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