COMMISSIONER OF GIFT TAX Vs. HAJEE MOOSA SAIT

JUDGEMENT

(1.) THE respondent-assessee was a partnership firm consisting of four partners, out of which one partner was the private firm. THE first three partners had their respective shares and they have transferred the shares to the fourth partner, that being the partnership firm. THE firm was dissolved on March 30, 1982, and after dissolution of the firm, the assets and liabilities were mutually adjusted among the partners, wherein, the house property valued at Rs. 3,81,294 was taken over by the fourth partner, the private limited company. THE Gift-tax Officer estimated the value of that house property as on March 31, 1981 at Rs. 11,95,000 as against its book value of Rs. 3,81,294. 60 per cent, of the difference between the estimated value and the book value of that property was treated as the amount liable for gift-tax, as it was gift to the firm by one of the partners and subjected the same to gift-tax.

(2.) ON appeal, the Commissioner (Appeals) following the decision of the Supreme Court in the case of CIT v. Bankey Lal Vaidya [1971] 79 ITR 594, accepted the contention of the assessee and set aside the order of the Assessing Officer. Pursuant to the same, this reference has been made to us at the instance of the Revenue, and the question referred to us is, "whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the provisions of Section 4(1)(a) of the Gift-tax Act are not attracted to the instant case ?"