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TMI Blog1994 (11) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... filed on 28-8-1982. In the computation of total income for assessment year 1982-83, the assessee declared income from M/s Munjal Sales Corporation in which she had share of 8.33 per cent. On 6-2-1982, the assessee gifted 36 per cent of her right, title and interest in Munjal Sales Corporation and its assets including her capital and right to share profits and losses to M/s Thakur Devi Investments Pvt. Ltd., Ludhiana. In effect the component of gift worked out to 3 per cent of the right, title, interest including share of profit and loss in the firm. A copy of the declaration of gift is available at page 2 of the assessee's first compilation. The said gift was accepted by the donee as per copy of the resolution of their Board dated 6-2-1982 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands. 4. The learned CIT(A), after a detailed discussion, accepted the contention of the assessee and held that since corpus had already been gifted by the donor and the gift had been accepted by the department, and section 60 of the Income-tax Act was not applicable, the share income which had been gifted by the assessee to M/s Thakur Devi Investments Pvt. Ltd. was not includible in the hands of the assessee by virtue of an overriding title. 5. The learned D.R. relied on the Tribunal's decision in the case of Mrs. Sudershan Kumari in IT Appeal No. 6 (Chd.) of 1988, dated 9-9-1992 for assessment year 1982-83. In that case also, there was a diversion by an overriding title and the Tribunal decided the issue against the assessee. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banwari Lal Aganvala were distinguishable. It was pointed out that there was an agreement between the assessee and the colliery to transfer a part of the commission to a trust but the trust was not a party to that agreement. Moreover, the commercial assets from which the income arose had not been transferred to the trust and hence the provisions of section 60 of the Income-tax Act were applicable. It was further submitted that so far as the facts of the present case were concerned, the trust to whom the share income had been gifted was a party to the agreement and the commercial assets from which the income arose, namely, the capital had also been transferred. 8. The learned Counsel for the assessee placed reliance on the Gujarat High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business or to require accounts or to inspect the books of account but entitles the transferee only to receive the share of profit of the transferring partner and the transferee was bound to accept the account of profits agreed to by the partners. It was vehemently argued that according to section 29 of the Indian Partnership Act, the partners continued to run the partnership firm and with a view to avoiding any confusion friction, the transferees had no substantial say in the matter of running of the business of the firm. According to the learned Counsel for the assessee, this section did not interfere with the claim of the assessee. 10. Reliance was also placed on the Gujarat High Court decision in the case of CIT v. Nandiniben Narot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 180 for the proposition that where the assessee was a partner in a firm as karta of the HUF and there was partial partition in the HUF, the share in the firm stood divided amongst the assessee, his wife and children by virtue of an overriding title created in favour of wife and children in respect of income from the firm. 12. Reliance was also placed on the Allahabad High Court decision in the case of CIT v. Raja Ram Jaiswal [1992] 195 ITR 834. In that case, certain amounts were advanced to the assessee under an agreement. The assessee invested those amounts in the firm in which he was a partner. A specified share of income from the said firm was paid to the lenders. It was held that the agreements between the assessee and the lenders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in whose favour the partner may have transferred a part of the share income. The case law cited by the learned Counsel for the assessee also supports the case of the assessee. The facts in the case cited by the learned D.R. are clearly distinguishable as rightly pointed out by Shri Subhash Aggarwal. Simply because in the case of Mrs. Sudershan Kumari where the matter was decided against the assessee on a concession from the learned Counsel for the assessee, the matter cannot be decided against the assessee in the present case. Looking to the entire facts and circumstances of the case, we are of the considered opinion that the learned CIT(A) had correctly directed the Assessing Officer to exclude the share income attributable to 36% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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