ASSISTANT COMMISSIONER OF INCOME TAX Vs. REKHA MUNJAL
INCOME TAX APPELLATE TRIBUNAL
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J. Kathuria, Accountant Member -
(1.) THIS appeal by the Revenue relates to assessment year 1982-83. The only effective ground is against the exclusion from the assessee's taxable income of share derived by the assessee from M/s Munjal Sales Corporation, Ludhiana and diverted by overriding title to M/s Thakur Devi Investments Pvt. Ltd.
(2.) For assessment year 1982-83, the asseessee declared total income of Rs. 3,24,634 in her return filed on 28-8-1982. In the computation of total income for assessment year 1982-83, the assessee declared income from M/s Munjal Sales Corporation in which she had share of 8.33 per cent. On 6-2-1982, the assessee gifted 36 per cent of her right, title and interest in Munjal Sales Corporation and its assets including her capital and right to share profits and losses to M/s Thakur Devi Investments Pvt. Ltd., Ludhiana. In effect the component of gift worked out to 3 per cent of the right, title, interest including share of profit and loss in the firm. A copy of the declaration of gift is available at page 2 of the assessee's first compilation. The said gift was accepted by the donee as per copy of the resolution of their Board dated 6-2-1982. The other partners of M/s Munjal Sales Corporation had given their consent to the proposed gift in favour of M/s Thakur Devi Investments Pvt. Ltd. vide their confirmation dated 14-1-1982, a copy of which is available at page 1 of the assessee's first compilation.
The assessee filed a gift-tax return declaring taxable gift at Rs. 33,380. This consisted of:
The Gift-tax Officer, however, computed the taxable gift at Rs. 95,301 vide order dated 21-12-1984. While the gifted capital was taken at Rs. 21,812 as shown by the assessee, the 3 per cent in the profit and loss of M/s Munjal Sales Corporation was, however, calculated at Rs. 78,489 as against the figure of Rs. 16,572 shown by the assessee. In the computation of total income annexed to the return for assessment year 1982-83, the assessee claimed that 36 per cent of her right, title and interest in M/s Munjal Sales Corporation was assessable not in her hands but in the hands of M/s Thakur Devi Investments Pvt. Ltd., Ludhiana. The Assessing Officer, however, rejected this contention of the assessee and assessed the entire share income from M/s Munjal Sales Corporation in the assessee's hands.
(3.) THE learned CIT(A), after a detailed discussion, accepted the contention of the assessee and held that since corpus had already been gifted by the donor and the gift had been accepted by the department, and Section 60 of the Income-tax Act was not applicable, the share income which had been gifted by the assessee to M/s Thakur Devi Investments Pvt. Ltd. was not includible in the hands of the assessee by virtue of an overriding title.;
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