9911796707
TMI Blog1983 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... lso been subjected to gift-tax and the matter travelled upto the Tribunal in that case wherein the Tribunal though held that the firm can be liable to gift-tax yet on the facts and circumstances of the case held that the GTO was in error in bringing to tax something which was not transferred. The above finding was in respect of the very same subject-matter which is under dispute before us though in the case of an AOP constituted of the very same four partners. 3. Since the gift-tax assessment made in the status of AOP was challenged before the AAC, she relying on the Tribunal's decision in respect of the very same subject-matter in the case of a registered firm in GTA No. 24 and C.O. No. 83/Chandi/79 dt. 5th June, 1981 on the basis that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are unable to accept the contention of the ld. Departmental representative. The attempt of the revenue in the instant case has been to rope in the taxpayer under the GT Act by a noval method of adopting a new status. Sometimes the assessees are subjected to tax as registered firm, on reconstitution of firm, sometimes the individual partners are subjected to gift-tax whereas in the instant case the attempt has been to rope in the four retired partners on reconstitution of a firm to gift-tax. According to us, the issue is simple where on reconstitution of a firm where division of future profit is in view with division of loss and other consideration result into a contract of running the new partnership as such the action cannot be termed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C) held that no gift-tax is payable on the goodwill of a firm's business in the event of reconstitution of the firm. Similarly, the finding of the Madras High Court in the case of Addl. CGT vs. A.A. Annamalai Nadar (1978) 113 ITR 574 (Mad) is as under : "The assessee, who was carrying on a business, converted the same into a partnership by taking his major son who was working with him in the business for remuneration and admitted his two minor sons to the benefits of the partnership, each of them being entitled to a 25 per cent share in the profits. The Gift-tax Officer held that the business of the assessee enjoyed a goodwill and, by taking his three sons into the partnership, the assessee transferred 75% of the goodwill of the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share of profits of the assignor. Therefore, on the death of a partner, where the firm is continued after his death, no specific share in the goodwill passed on to his heirs as he did not own any specific share in the goodwill of the firm. Under section 5 of the Estate Duty Act, duty is leviable only upon the principal value of property which passes on his death. Goodwill has no value in a going concern of partnerships." The action of the AAC in the light of above discussion and for the reasons given by her in her order and as per earlier Tribunal's decision, referred to above, is confirmed. 7. The assessee in its cross objection has only supported the order of the AAC. The revenue's appeal having been dismissed, the cross objection ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
