COMMISSIONER OF GIFT TAX Vs. CHITHRA

JUDGEMENT

(1.) This reference is made by the Income Tax Appellate Tribunal, Cochin Bench at the instance of the Gift Tax Commissioner, Trivandrum. The reference applications are under S.26(1) of the Gift Tax Act, 1958. The assessment years are 1987-88. These arise out of reference application Nos. 60 and 51 of 1998. The question of law referred to are as follows:

(2.) The facts which gave rise to the above reference are as follows:

(3.) Learned counsel for the Department, Sri. Raveendranatha Menon contended that it is a case where a partner retired from a partnership. The goodwill was an asset of the firm. The partner was entitled a share in the goodwill. But the goodwill was parted with without any consideration. According to him, the remaining partners had an advantage in that, as their share increased and hence, there was a transfer of property as per the Gift Tax Act. He submitted that decision in T. M. Luiz's case (supra) has been upheld by the Honourable Supreme Court in the decision reported in Commissioner of Gift Tax v. T. M. Luiz 2000 (7) SCC 486 = (2000) 163 C.I.R. Reports 3591. But according to the learned counsel, so far as this case is concerned there is some difference in fact. There is no evidence to show that any amount was paid to the retiring partner on his retirement. He further relied on another decision of the Honourable Supreme Court reported in B. T. Patil & Sons v. Commissioner of Gift Tax (2000) 163 C.I.R. Reports 363.