TaxTMI 
TaxTMI 
2001 (9) TMI 7
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.... ?" We have heard Mr. B. B. Naik, learned counsel for the Revenue, and Mr. M. J. Shah, learned counsel for the respondent-assessee. The assessee along with five others including the assessee's brother was carrying on business in the name and style of Abadi and Co. under a partnership deed dated April 10, 1971. The assessee had a 22 per cent. share in the said firm while his brother had a 15 per cent. share. As the assessee wanted to be a qualified chartered accountant, he retired from the said firm on October 26, 1973, i.e., at the end of S. Y. 2029 after withdrawing his capital from the firm. A new deed of partnership was executed on November 16, 1973, to carry on business with effect from October 27,1973, Le., the first day of S. Y.....
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....favour of the assessee's mother and brother. Learned counsel heavily relied on the principle laid down in the aforesaid decision that goodwill is property and when partners are introduced or minors are admitted to the benefits of a partnership firm, the share of an existing partner is reduced thereby and therefore the right to the money value of the goodwill stands transferred and the transaction constitutes a "gift" under the Gift-tax Act, 1958. On the other l1and, Mr. Manish J. Shah, learned counsel for the respondent-assessee, has submitted that since the assessee had withdrawn his capital from the firm, there was no question of any gift made by the assessee in favour of any other person. The assessee retired on October 26, 1973, and ....
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....ill. That is the only amount which the Gift-tax Officer quantified for levying gift tax. In CGT v. T. M. Louiz [2000] 245 ITR 831, the apex court has in terms held as under : "The definition of 'gift' makes it clear that there has to be a transfer by one person to another of movable or immovable property such transfer has to be voluntary and without consideration in money or money's worth. What is, therefore, absolutely essential for the purposes of a gift is a transfer of property. 'Transfer of property' is defined for the purposes of the Gift-tax Act as any disposition or conveyance, or assignment or settlement or delivery or payment or other alienation of property. The question, therefore, is whether, on the facts of the case at hand,....
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....lal [1987] 166 ITR 124 (SC) is distinguishable on the facts as in that case upon reconstitution of the firm, share of one of the partners-assessee (Chhotalal-C) was reduced from seven annas in a rupee to four annas, as three anna share was given to the assessee's minor sons who were admitted to the benefits of the partnership. "No alteration was, however, made regarding the share capital standing in the name of the assessee." Since no capital was contributed by the minor sons for getting that three anna share nor did the assessee receive any consideration from his minor sons for readjusting the shares of the respective parties in the aforesaid manner, the assessee had clearly made a gift to his minor sons of the three annas share and it was....
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.... in a subsequent decision of the Supreme Court, the explanation in the subsequent decision will have to be followed by the High Court, even if the subsequent decision is rendered by a smaller Bench of the Supreme Court. In view of the above principle, the decision in the case of Chhotalal Mohanlal [1987] 166 ITR 124 (SC) has to be understood as explained by the Supreme Court in its later decision in the case of T. M. Louiz [2000] 245 ITR 831 in the penultimate para. of which the facts in Chhotalal Mohanlal's case [1987] 166 ITR 124 (SC) are explained as under : "The judgment of this court in Chhotalal Mohanlal's case [1987] 166 ITR 124, needs a brief explanation. When P retired, the firm was reconstituted, and C's minor sons were admi....