TaxTMI 
TaxTMI 
2001 (10) TMI 86
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....essment year 1970-71 in respect of arrangement in pursuance of the agreement dated November 21, 1969, between the assessee and Khoday Industries Pvt. Ltd. ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that a partnership firm is an assessable entity under the provisions of the Gift-tax Act, 1958 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the gift, if any, in the arrangement was not exempt under the provisions of section 5(l)(xiv) of the Act ?" The High Court having answered the questions against the assessee, these appeals have been preferred by the assessee. The appellant has not pressed questions Nos. 2 and 3. The only....
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.... the appeal preferred by the assessee, the appellate authority held that the deemed gift made by the assessee under the agreement dated November 21, 1969, was exempt under section 5(l)(xiv) of the Act on the ground that the gift made was for the purpose of the business of the donor. On the appeal of the Revenue, the Income-tax Appellate Tribunal, reversing the order of the Commissioner of Income-tax (Appeals), held that the agreement amounted to transfer of property ; the consideration was not adequate with the result that there was a deemed gift within the meaning of section 4(l)(a) of the Gift-tax Act and that the transaction was not bona fide. Therefore, the Tribunal held that section 5(l)(xiv) which, inter alia, provides that the gif....
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.... was less than half the value of the property. The appellant did not bring on record any special circumstances which may justify such a reduced consideration. The conclusion drawn by the Tribunal and affirmed by the High Court that the transaction was not bona fide and the property was transferred otherwise than by adequate consideration is a very possible conclusion on the facts found. In this view, we are unable to accept the contention that it was a commercial transaction and not a gift. Learned counsel next contends that assuming that it was a gift, then too no gift-tax is payable as the case squarely falls within the ambit of section 6(2) of the Gift-tax Act read with rule 11 of the Gift-tax Rules. The contention is that it is a gif....
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.... complete years included in the period for which the gift is not revocable and the average of the income received from the property during the three years or such lesser period of complete years in which such property was in existence, preceding the previous year for the year of assessment after discounting it at a rate of 4 per cent. per annum : Provided that where the property was in existence for less than one complete year preceding the previous year for the year of assessment or came into existence in the previous year for the year of assessment, the income from such property for one complete year shall be the income which would have been receivable, if the property were in existence for one complete year." The Tribunal held that....