TaxTMI 
TaxTMI 
2004 (11) TMI 68
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....e, the Tribunal is right in holding that the gifts of Rs. 10,000 made on March 29, 1980 to Smt. Chander Kala and of Rs. 15,000 to Smt. Tara Devi on March 3,1981, were a part of the same transaction and a device to bypass the provisions of section 64(1)(vi) of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the share income of Smt. Chander Kala (Smt. Tara Devi) from the firm M/s. Verma Brothers Toka Store, is includible in the income of Shri Om Dutt (Smt. Sushila Devi) under the provisions of section 64(1)(vi) of the Act?" The assessees, namely, Shri Om Dutt and Smt. Sushila Devi, are related to each other. Both of them were partners of the registered firm, M/s.....
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.... appeals filed by the Revenue. The relevant extract of the order dated January 31, 1985, passed by the Tribunal is reproduced below: "There are only two gifts involved in the transaction. Om Dutt has made a gift to the daughter-in-law of Smt. Sushila Devi and Smt. Sushila Devi has made a gift to the daughter-in-law of Om Dutt. These are undoubtedly cross-gifts by Om Dutt and Smt. Sushila Devi. Another issue raised is that there is a time-gap of about a year and, therefore, these could not be the part of the same transaction. In our opinion, on the facts of this case, it cannot be denied that the gifts were a part of the scheme. The ultimate object was that both the donees should become partners in the firm of M/s. Verma Brothers Toka Store....
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....TR 142 and it was held as under: "If two transfers are interconnected and are parts of the same transaction in such a way that it can be said that the circuitous method was adopted as a device to evade the implications of section 16(3)(a)(iii) or (iv) of the Indian Income-tax Act, 1922, the case will fall within the section. The same considerations that are relevant in the application of clause (iii) of section 16(3)(a), are relevant in the application of clause (iv)." In CIT v. Kanchanlal Vadilal [1993] 203 ITR 218, a Division Bench of the Bombay High Court considered a question similar to the one referred by the Tribunal in the present case and answered the same in favour of the Revenue. The facts of that case were that the assessee, K,....