M M MAHAJAN Vs. GIFT-TAX OFFICER

JUDGEMENT

(1.) THE challenge in this bunch of writ petitions is to the notice issued by the Gift-tax Officer to the petitioners on March 18, 1985, under section I6 (1) (a) of the Gift-tax Act, 1958.

(2.) THE matter here pertains to the assessment year 1977-78. All the petitioners were partners of the firm, Messrs. Mahajan International. On December 31, 1986, in pursuance of an agreement for sale entered into between the parties, Mahajan International sold the running business of this firm with all its assets and liabilities to Panipat Foods Limited for a sum of Rs. 20,21,767. 68. The Inspecting Assistant Commissioner held the market value of the business of the firm to be more than 15 per cent, of the consideration shown in the sale deed for the transfer of the business, the fair market value" as assessed by the Inspecting Assistant Coqnmis-sioner being Rs. 69,26,000.

(3.) THE sale price of the business of the assessee-firm was credited to the accounts of the partners of the firm, that is, the petitioners. Later, when the fair market value was assessed by the Inspecting Assistant Commissioner at Rs. 69,26,000, the difference between the price as shown in the sale deed and that as assessed by the Inspecting Assistant Commissioner was sought to be taxed as a deemed gift under section 4 (1) (a) of the Gift-tax Act, 1958, and as no return had been filed under the said Act, the impugned notice under section 16 (1) (a) thereof was issued to all the petitioners. It is this notice that is now sought to be challenged in these writ petitions on various grounds primarily on the plea that the notice had been issued without jurisdiction.