R RANGANATHA REDDIAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS Original Petition is under S. 26(1)/(3) of the GT Act, 1958. The application is by the assessee. The assessment year in question is 1972-73. The assessee/petitioner wanted the following questions to be referred by the Tribunal for determination by this Court :

(2.) COUNSEL for the petitioner submitted that the Tribunal has gone wrong in not referring the second question which is more fundamental in nature since if the second question is answered in favour of the assessee, no other question need be considered. According to the petitioner there is no gift involved in the case. His case is that there is clear finding that one of the partners in the newly constituted firm has given consideration. In the Tribunal's order it is seen stated : "We may make it clear that in determining this value, as mentioned in the CGT(A)'s order, the consideration given by Shri R. Srinivasan, one of the new partners brought under the deed dt. 1st Oct., 1971 should also be taken into account". From the Tribunal's order, counsel for the petitioner wanted to say that there is clear evidence as to the fact that at least one of the partners has contributed consideration for the new partnership. This aspect of the matter gives a new colour to the whole question as to the fact whether there is gift by the assessee. Counsel relied on a decision reported in CGT vs. K.A. Abdul Razack (1991) 97 CTR (Ker) 223 : (1991) KLJ (Tax Cases) 577. Counsel for the Revenue referred us to the decisions reported in CGT vs. Chottalal Mohanlal (1987) 61 CTR (SC) 263 : (1987) 166 ITR 124 (SC) and K.K.Achuthan vs. CGT (1988) 69 CTR (Kar) 233 : (1988) 170 ITR 518 (Kar). In both these cases there was absolutely no consideration from any of the partners who have been inducted in the new partnership. These cases have been considered in (1991) 97 CTR (Ker) 223 : 1991 KLJ (Tax Cases) 577 (supra). The question whether the assessee has made a gift, according to them 70 per cent of the assets of the dissolved firm is a question to be considered and in that repsect, we feel that the second question formulated by the petitioner deserves to be considered by this Court. In regard to question Nos. 3, 5 and 6, counsel did not seriously urge any point. In regard to question No. 4, counsel submitted that the assessee/petitioner had only share income of the firm and the previous year of the firm was 30th Sept., 1991. Counsel submits that in view of the definition of 'previous year' under S. 2(xx) of the GT Act, the Tribunal went wrong in fixing the previous year as one ending on 31st March, 1972. We feel that this is also a matter which requires consideration by this Court. In the result, we direct that the Tribunal should state the case with the above two questions for reference to this Court. The Original Petition is allowed as above.