VIMADALAL, J. - (1.) 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.
(2.) 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 IT Ref. No. 44 of 1964 [New Kaiser i Hind Spg. and Mfg. Co. Ltd. vs. CIT (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 11 of the statement of the case is concerned, a few facts need be stated. The business of M/s Popatlal Mulji & Co. was originally said to belong to the HUF consisting of the assessee and his son. It may, however, be stated that it was subsequently conceded that the said business belonged to the assessee as his sole proprietary concern and not to the HUF. The capital of that business stood at the end of Samvat year 2009 (the asst. year 1954 55) at Rs. 1,32,186. On the closing day of Samvat year 2009, the assessee got an entry made crediting half of that capital, viz., Rs. 66,093, to the name of his son, Mansukhlal. The said Mansukhlal thereafter became a partner with his father in the said business of Popatlal Mulji & Co. w.e.f. the 7th of November, 1963, and the said amount stood credited as his capital to an account standing in the name of the said Mansukhlal in the books of the partnership of Popatlal Mulji & Co. On those facts, the question which arose before the taxing authorities was, whether the making of the relevant entries by the assessee effected a valid gift in favour of his son, Mansukhlal, in respect of the said sum of Rs. 66,093.
(3.) THE findings of fact arrived at by the Tribunal are set out in paragraph 9 of its order dated 9th October, 1964. Those findings, briefly stated, are that since the business of Popatlal Mulji & Co. was initially a proprietary business, the donor must be taken to have consented to the gift of the said sum of Rs. 66,093 to his son, and that the donee who was also a major had accepted that gift by utilising it in the partnership as his capital. The Tribunal has also accepted the statement made before them that the capital that was so credited to the assessee's son in the partnership books was solely operated upon by the assessee's son and not by the assessee himself. The question that has been referred to us in paragraph 11 of the statement of the case must be answered on the basis of these findings of fact arrived at by the Tribunal.;