1994 (3) TMI 128

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.... assessee filed return of income for asst. yr. 1985-86 on 24th June, 1985 and the same was accepted under s. 143(1) vide order dt. 16th Jan., 1987. The ITO issued a notice under s. 143(2) on 18th March, 1988 and the assessment was completed under s. 143(3) on 30th March, 1988. It is this assessment which is the subject matter of appeal before us. During the course of scrutiny of accounts, the learned ITO noted that the assessee had made a gift of Rs. 5,000 on 1st July, 1983 to the wife of his younger brother—Smt. Mumtazben and likewise his younger brother, viz., Shri Faizulla Abdullabhai Makati made a gift of Rs. 5,000 on 1st July, 1983 to the wife of the assessee Smt. Bilkishbai. Both these ladies on receipt of these amounts of Rs. 5,000....

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....st July, 1983 and with the help of gifted amounts a new firm came into existence on the same day, i.e., on 1st July, 1983. 5. In the written submissions filed on behalf of the assessee, it has been submitted that the issue in question was covered in favour of the assessee by the decision of the Bombay High Court in the case of N.K. Pandya. 6. We have considered the rival submissions. From the facts of the case it is evident that the two brothers, viz., Shri Gulam Abbas Abdullabhai and Shri Faizulla Abdullabhai Makati made cross gifts of Rs. 5,000 each on 1st July, 1983 to enable the two ladies, viz., Smt. Mumtazben (wife of brother of assessee) and Smt. Bilkisbai (wife of the assessee) to become partners of the firm M/s Makati Commerc....