Law:

Section:

Section 2(xii) of the Gift-tax Act, 1958 - Gift - Assessment year 1987-88 - Assessees were partners in a firm - During relevant assessment year they retired from said firm - Assessing authority held that assessees had transferred right to receive future profits in favour of partners newly admitted on their retirement - Whether Tribunal was right in holding that no element of gift was involved when assessees retired from firm in which they were partners - Held, yes CASES REFERRED TO CGT v. Smt. R. Sarojini [1993] 201 ITR 104 (Ker.) [Para 2], CGT v. T.M. Luiz Kannamally [1989] 180 ITR 257/ 45 Taxman 204(Ker.) [Para 3], CGT v. T.M. Louiz [2000] 245 ITR 831/ 112 Taxman 622 (SC) [Para 3] and CGT v. P.K. Somarajan Pillai [2004] (2004) 265 ITR 395/[2003] 127 Taxman 632 (Ker.) [Para 3]. P.K.R. Menon and George K. George for the Applicant. P. Balachandran for the Respondent. JUDGMENT G. Sivarajan, J. - The question referred at the instance of the Department in all the four cases is the same and it reads as follows : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no element of gift was involved when the assessee retired from the firm in which he was a partner?" 2. The respondent-assessees were partners of a firm, M/s. Hotel Yuvarani, Ernakulam. During the assessment year 1987-88 all the four assessees retired from the said firm. The assessing authority took the view that the assessees have transferred the right to receive future profits in favour of the partners newly admitted on their retirement. The first appellate authority confirmed the assessment. In appeal by the assessees, the Tribunal, relying on the decision of this Court in CGT v.…

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