COMMISSIONER OF GIFT TAX Vs. RAMESHCHANDRA RAVJIBHAI

JUDGEMENT

(1.) ALL these references involve the following common question of law which has been referred to us for our opinion in respect of the asst. yrs. 1979-80 and 1980-81:

(2.) WE have heard Mr. Manish R. Bhatt, learned standing counsel for the Revenue. Though served, none appears on behalf of the respondent-assessee.

(3.) APART from the aforesaid decision in Chhotalal Mohanlal (supra), our attention is also drawn to the latest decision of the apex Court in Sree Narayana Chandrika Trust vs. CGT (2003) 181 CTR (SC) 395 : (2003) 261 ITR 279 (SC) wherein the apex Court has referred to all its previous decisions on the controversy and has held that when the incoming partner brings any contribution towards the capital of the firm, the said fact together with the obligations undertaken by the incoming partners of sincerely and faithfully carrying on the business for the common advantage of the firm was adequate consideration for reallocating the share of the profits. The apex Court has also held that even if there is a managing partner or administrative partner, it is a matter of convenience. The apex Court has held in the aforesaid decision that obligations to sincerely and faithfully carrying on business for the common advantage of the firm is an obligation arising out of the partnership and also ordinarily under the partnership deed in almost every case. Hence, when the incoming partner makes contribution towards capital such capital together with such obligation of sincerely and faithfully carrying on business for the common advantage of the firm is adequate consideration for reallocating of the shares of the profits of the firm.