COMMISSIONER OF GIFT TAX Vs. SHRAVENKUMAR P PATEL

JUDGEMENT

(1.) BY this reference under S. 26(1) of the GT Act, 1958 (hereinafter referred to as " the Act "), the Tribunal, Jabalpur (Bench Jabalpur), has referred the following question of law to this Court for its opinion :

(2.) THE material facts giving rise to this reference briefly are as follows: The assessee is an individual and the assessment year in question is 1972 -73. While framing the assessment, the GTO found that the assessee was running a proprietary business of publishing a newspaper; that during the accounting year in question, the assessee had converted his proprietary business into a partnership concern by admitting his brother, Shri Siddharth Kumar Patel, as a partner; that the balance sheet of the proprietary business indicated development rebate reserve of Rs. 31, 904 and that the proprietary business had goodwill and that by admitting Shri Siddharth Kumar Patel as a partner, the assessee had made a gift of 50 per cent of the development rebate reserve and the goodwill. The GTO accordingly valued the taxable gift of development rebate reserve at Rs. 15,952 and of goodwill at Rs. 92,500. Aggrieved by the order passed by the GTO, the assessee preferred an appeal before the AAC which was allowed. The second appeal preferred by the Revenue before the Tribunal was dismissed. Hence, at the instance of the Revenue, the aforesaid question of law has been referred to this Court by the Tribunal for its opinion.

(3.) FOR all these reasons, our answer to the question referred to this Court is in the affirmative and against the Revenue. In the circumstances of the case parties shall bear their own costs of the reference.