COMMISSIONER OF GIFT TAX Vs. VIJAYAKUMAR T R

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal, Cochin Bench, has referred the following question of law for the decision of this court :

(2.) THE respondents are assessees to gift-tax. We are concerned with the assessment year 1977-78. A common question of law arises for consideration in both the cases. THE respondents were partners in a firm of abkari contractors. THEy retired from the firm on March 31, 1977. THEy filed returns under the Gift-tax Act showing "nil" gift. THE Gift-tax Officer, by order dated November 10, 1982, assessed the respondents to gift-tax regarding their share in the goodwill of the firm. In appeal, the Appellate Assistant Commissioner held that the retirement of the partner from a partnership firm does not involve any gift. He allowed the appeals. THE orders so passed by the Appellate Assistant Commissioner were confirmed by the Income-tax Appellate Tribunal by a common order dated September 10, 1987. It is thereafter at the instance of the Revenue that the question of law formulated hereinabove has been referred for the decision of this court.

(3.) IN the light of the Bench decision in CGT v. T.M. Luiz Kannamally [1989] 180 ITR 257 (Ker) and our own decision in INcome-tax Reference No. 14 of 1990 (see [1994] 210 ITR 976), we are of the view that the Appellate Tribunal was justified in holding that no gift exigible to tax was involved in both the cases. We answer the question referred to this court in the affirmative, against the Revenue and in favour of the assessee. The references are disposed of as above.