TaxTMI 
TaxTMI 
1998 (8) TMI 54
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee had no interest in the partnership firm of Cadila Laboratories except to receive Rs. 2,500 per month under the agreement dated January 1, 1968 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal erred in law in holding that even if the assessee had any other interest since under both partnership deed dated April 3, 1963, and January 1, 1968, the partnership was at will the asset was precarious ? 3. Whether, the Appellate Tribunal was on the facts and in the circumstances of the case, right in law in holding that neither section 2(e)(1) nor section 2(e)(2) of the Wealth-tax Act had any application to the facts of the case ? 4. Whether, the Appellate Tribunal erred in law in directing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hould not be added in the total wealth of the assessee. The Wealth-tax Officer did not accept this contention on the ground that the assessee had inherited the value of goodwill as on October 10, 1967, when Govindlal Tamboli passed away. In the returns filed by the assessee for the years 1970-71 to 1973-74 also the assessee contended that the value of Rs. 37,884 which was shown, should not be included in his wealth, but the same was not accepted. The Appellate Assistant Commissioner held that after the death of Govindlal Tamboli, his 15 per cent. share in the firm devolved on the assessee. It was also observed by him that on the date of death of Govindlal Tamboli, his capital account in the books of the firm showed a credit balance of Rs. 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessment years and the wealth was enhanced by Rs. 3,62,116 in each of the assessment years 1969-70 to 1974-75. The assessee carried the matter to the Tribunal and the Tribunal held that the assessee did not have any interest in the partnership firm except to receive Rs. 2,500 per month. It was observed that the agreement to receive the said amount was not arrived at on the ground that it was collusive and that the subsequent events showed that the agreement to receive Rs. 2,500 per month was in the interest of the assessee, who was a minor. It was held that the assessee was not the heir of Govindlal Tamboli and was not entitled under the partnership deed dated April 3, 1963, to be admitted to the partnership. It was also held that....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., except those which are specified therein. The property which had devolved on the assessee on October 10, 1967, was an asset belonging to the assessee, which required to be included in his net wealth. Any agreement which may have been entered into after the property had devolved in the above manner under the will in respect of such property was only an arrangement as to how the asset which the assessee acquired should be dealt with. The crucial date for ascertaining the value of the asset acquired under the will by the assessee was the date on which the bequest of legacy opened which was on October 10, 1967, The Assessing Officer was required to work out the value of the asset so acquired in the context of that date and the subsequent arra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion No. 2, it is obvious that since, admittedly the assessee, who was a minor, could not have become a partner in the firm. He was never admitted to the benefits of the partnership firm. He, therefore, did not have any interest in the firm in the capacity of a partner or a minor admitted to the benefits of a partnership. He was only entitled to the share of Govindlal Tamboli in the firm, which had devolved on him under the will and had become his property when the bequest opened on October 10, 1967, which alone he was entitled to recover from the firm. Since the position of his rights already crystallised on October 10, 1967, it was immaterial whether the partnership was, at will. In view of our answer to questions Nos. 1 and 4, this quest....