1997 (12) TMI 67

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....ing questions were referred for opinion: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law and in fact in holding that there was no gift liable to be taxed under the Gift-tax Act, 1958 ? (2) Whether, on the facts and in the circumstances of the case, the capital brought in by the new partners and the time and labour contributed to the firm constit....

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....fficer filed an appeal before the Tribunal and the assessee also filed a cross-appeal. The Tribunal dismissed the appeal as well as the cross-objections. Hence, the above reference. By going through the orders, we find that the Gift-tax Officer found that as on February 29, 1980, the excess of assets over the liabilities amounting to Rs. 7,55,510 was treated in the books of the firm as the capi....

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....ofits. The Commissioner held that all the new partners brought in sufficient capital and, therefore, there was sufficient consideration. The Tribunal, on the other hand, proceeded on the basis that the Gift-tax Officer initiated proceedings for having transferred a part of the goodwill to the new partners. All the partners have contributed adequate capital in addition to time and labour and, there....

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....unting to Rs. 3,00,000 is compared with Rs. 6,20,000 which is taken as the share in the future profits for the purpose of deciding that there is adequate consideration. We find that the approach of the officers in reference to the actual amount of transfer involved is not clear. The Tribunal proceeded on the basis that the assessee could withdraw the profits at any time and that there has been a c....