CIT Vs. SMT. ASHA GULATI

JUDGEMENT

(1.) THIS appeal by the revenue under section 27A of the Gift Tax Act, 1958 (in short 'the Act') is directed against the order dated 28 -11 -2001, passed by the Income Tax Appellate Tribunal Delhi Bench -B, New Delhi (hereinafter referred to as 'the Tribunal') in GTA No. 32/Del/1994, pertaining to assessment year 1989 -90.

(2.) BRIEFLY stated, the background facts giving rise to the appeal are as follows : The assessed was a partner in a firm, namely, M/s. Sat Kartar International with one Mohan Gulati. She retired from the firm on 2 -8 -1988 and at the time of retirement she took the balance amount outstanding in her capital account, but did not receive any amount towards goodwill and import entitlement of the said firm. The import entitlement of the said firm was subsequently sold by Mohan Gulati for Rs. 6,55,514.

(3.) THE assessing officer was of the view that the assessed had made a gift in favor of Mohan Gulati in respect of her share in the goodwill and import entitlement of the firm. He, accordingly, valued the goodwill of the firm at Rs. 1,45,72,354 on the basis of the earnings of the firm for the past three years and determined the assessed's share therein at Rs. 72,86,177, which was treated as the value of the gift made by the assessec to Mohan Gulati. He also treated 50% of the sale price of the import entitlement as assessed's share in it and brought the said amount also to gift tax in her hands.