Law: Income Tax Act, 1922

Section:

GW-Transfer by entries in books of accounts-Transfer by father to major sons-Amount transferred operated upon by son only-Whether valid ZW-Held yes. In the books of accounts of a separate business of a father, a certain amount was credited to his son as the sons share of the capital for his being taken in as a partner in the business. The Tribunal found that the amount so credited to the son in the books was solely operated upon by the son: Held, that there was a valid gift in favour of the son of the sum credited to his account. There can be a valid gift effectuated by making entries in books of accounts, if there is evidence to show that the gift was made by the donee and accepted by the donee and was acted upon by both of them. Case followed:- Chimanbhai Lalbhai v. Commissioner of Income Tax (1958) 34 I .T.R. 259 Cases referred to:- New Kaiser-ir-Hind Spinning and Manufacturing Co. Ltd. v. Commissioner of Income Tax (1977) 107 I.T.R. 760; Paliram Mathuradas v. Commissioner of Income Tax (1966) 59 I.T.R. 278 and Virji Devshi v, Commissioner of income Tax (1967) 65 I.T.R. 291. ORDER VIMADALAL J.-TWO questions have been referred to us on this reference, one at the instance of the department which is set out in the concluding part of paragraph 11 of the statement of the case, and the other at the instance of the assessee which is set out in paragraph 12 of the statement of the case. A notice of motion was taken out by the revenue for certain additional questions which we have dismissed today by a separate order. We are, therefore, concerned only with the questions referred to us which are set out in paragraphs 11 and 12 of the statement of the case. As far as the question set out in paragraph 12 of the statement of the case is concerned, the learned counsel have stated that in view of our judgment dated 4th December, 1973, in Income Tax Reference No. 44 of 1964 [New Kaiser-i-Hind Spg. & Mfg. Co. Ltd. v. Commissioner of Income Tax [1977] 107 ITR 760 (Bom)], the said question must, by consent, be answered in the affirmative and in favour of the revenue. As far as the question set out in paragraph II of the statement of the case is concerned, a few facts need…

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