COMMISSIONER OF GIFT TAX Vs. SHYAM LAL

JUDGEMENT

(1.) THE Tribunal, Allahabad, has referred the following question of law under Section 26(1) of the GT Act, 1958, hereinafter referred to as the Act, for opinion of this Court : 'Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that there was no deemed gift of the share, of the goodwill in favour of the new partners ?'

(2.) THE present reference relates to the asst. yr. 1976 -77.

(3.) IN pursuance of the above findings, the GTO levied gift -tax on Shri Shyam Lal, Shri Ram Lal and Shri Nand Lal, respectively. For this purpose, he computed the value of the goodwill of the old firm and then determined the taxable gift in the hands of the respective partners, i.e., the assessees before us. He rejected the claim of the assessee that the gifts were exempt from tax under Section 5(1)(xiv) of the GT Act.