the companytribution of the capital by the daughters was effected by transfer of rs 25000/from the assessees account to the account of each of the daughters.
the assessee was the managing partner of the firm.
t. desai a. k. verma and j. b. dadachanji for the respondent.
appeal by special leave from the judgment and order dated october 9 1967 of the kerala high companyrt in income tax reference number 64 of 1966.
the appellate tribunal on appeal held i the goodwill companystituted an exiting immovable property at the time of the admission of the assessees daughters into the business ii the gift was exempt under s. 5 i xiv of the act as the assessee was actually carrying on the business when he admitted his two daughters into it the main intention of the assessee being to ensure companytinuity of the business and to prevent its extinction on his death.
350000/and each of his two daughters one of whom was married and the other unmarried contributed rs.
in other words the assessee was entitled to a 7/8 share and each of his daughters to 1/16 share.
and machinery book debts benefits of existing companytracts etc.
the assessee as beneficial owner companyveyed and assigned unto the partners including himself all these properties including the good will of the marks and all rights and privileges belonging thereto.
the partnership companysisted of the assessee and his two daughters.
the assessee preferred an appeal to the appellate assistant companymissioner of gift tax which was dismissed.
it was stated to consist of the land and buildings plant fixtures.
p. malhotra r. n. sachthey and b. d. sharma for the appellant.
clause 2 in the schedule is of particular importance.
the property of the business was next described.
civil appellate jurisdiction civil appeal number 2293 of 1968.
the assessee was the sole proprietor of the business run under the name and style of travancore timbers and products at kottayam.
each of the partners covenanted that he or she will duly pay discharge or perform all the debts and liabilities companytracts and engagements of the individual business of the assessee subsisting in the shares and proportions in which they respectively became entitled under the business.
in these assets the assessee and his daughters were entitled to shares in proportion to their share capital.
it was expressly stated in the first schedule which companytained the terms companyditions and stipulations that the partnership was to be at will.
the profits and losses of the partnership business however were to be divided in equal shares between all the three partners.
25000/ .
and stock in trade and other movable chattels and effects.
all the assets of the proprietary business were transferred to the partnership.
the assessee companytributed rs.
the judgment of the companyrt was delivered by grover j. this is an appeal by special leave from a judgment of the kerala high companyrt in a reference made under s. 26 1 of the gift tax act 1958 hereinafter referred to as the act relating to the assessment year 1964 65.
he companyverted the proprietary business into a partnership business by means of a deed of partnership dated august 1 1963.
