1979 (6) TMI 71

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ting his major son and granting 75 per cent share in the firm. The GTO asked the assessee to show cause why this transfer of 75 per cent of the share in the business should not be treated as taxable gift. The assessee filed a written reply on 13th Dec., 1977 stating that the firm had no business other than dealership in IOC Ltd. which was terminable at will. It was also pointed out that though the assessee was the only agent in Agartala for several newspapers for the last 35 years, the agency has been terminated suddenly in the preceding year. However, the GTO made an ex-parte assessment computing the value of taxable gift at Rs. 41,065. He took the average commercial profit for the last five years and adding interest of 10 per cent on capi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....mely its goodwill cannot be sustained and no gift-tax was payable on the goodwill of the business. In view of this decision there are no merits in the cross-objection. The Supreme Court has further held that for the exemption under s. 5(1)(xiv) it must be established that there was some integral connection or relation between the making of the gift and the carrying on of the business and the object in making the gift or the design or intention behind it had to be related to the business. In the present case the partnership deed recites that, "whereas the first party had been dealing in miscellaneous goods and also carrying on newspapers agency, as well as dealership of M/s Indian Oil Corpn. Ltd. under the name and style of M/s Sarala Stores....