1970 (1) TMI 1

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.... of the subject-matter of the gift under the Mohamedan law in the present case and the gift-tax was rightly attracted ?" The assessee, Mohammad Mustafa, was a member of a partnership firm, " Mohammad Mustafa and Sons " There were four partners in all, and three of them, including the assessee, " retired " from December 31, 1958. The assessee had contributed a capital of Rs. 31,016-12-0, and on his retirement that amount was divided between his three sons, Mohammad Masood, Mohammad Noman and Mohammad Suleman. It appears that the amount was transferred in three equal sums from the account of the assessee in the books of the firm to the respective capital accounts of the three sons on December 31, 1958 The Gift-tax Officer treated the three ....

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.... December 31, 1958, evidenced by a transfer of capital from the account of the assessee to the accounts of his three sons represented gifts taxable under the Gift-tax Act ? " It is contended for the assessee that there can be no gift under the Mohamedan law unless there has been delivery of the property gifted, and inasmuch as, in the instant case, there has been no actual delivery of property to the sons by the assessee, no valid gift in the eye of Mohamedan law came into existence. We are unable to accept this contention. Section 3 of the Gift-tax Act charges a tax in respect of gifts. Section 2(xii) of the Act defines a " gift " as a transfer of movable or immovable property by one person to another, and section 2(xxiv) defines " transf....