SRI JAGATRAM AHUJA versus THE COMMISSIONER OF GIFT TAX, HYDERABAD

Citation: [2000] SUPP. 4 S.C.R. 1 · Decided: 17-10-2000 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SRI JAGATRAM AHUJA 
A 
THE COMMISSIONER OF GIFT TAX, HYDERABAD 
OCTOBER 17, 2000 
[S.P. BHARUCHA, S.N. PHUKAN AND SHIVARAJ V. PATIL, JJ.] 
B 
Gift Tar, Act, 1958-Section 2 (xii), (xiv)-Release by partner of his 
rights in favour of another partner in assets of firm for a fvced consideration 
when the market value of assets in proportion to his share is in excess C 
thereof-Whether constitutes transfer of property for Gift tax purposes-Held, 
it does not constitute a transfer of property and therefore not liable to Gift 
tax. 
Interpretation of Statutes : 
Words and phrases defined in one statute as judicially interpreted not 
a guide to construction of the same words or expressions in another statute 
unless both the statutes are para-materia legislations-Or there is a specific 
provision to construe the meaning as defined in the other statute. 
D 
Appellant-assessee and his brother were partners in a partnership firm. E 
On retirement of the assessee, a Deed of Dissolution was executed. As per 
the Deed, the brother got all assets and liabilities of the firm, which included 
land, buildings, profits and goodwill. The assessee got a fixed sum of 
Rs. 3,00,000 which was based on partnership agreement. A Release Deed 
was executed by the assessee in favour of his brother. 
F 
Gift Tax Officer treated the release by the assessee of the excess in 
favour of the another partner as gift, which was also upheld by Commissioner 
(Appeals). Tribunal reversed the decision of the authorities in favour of the 
g'i4'essee. The High Court decided the question in favour of the Revenue. 
ht appeal to this Court, it was contended by the assessee that the 
decisions relied on by the High Court in support of its conclusion were not 
directly on the point and some of them arose under the Estate Duty Act. 
Allowing the appeal, this Court 
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G 
H 
2 
SUPREME COURT REPORTS (2000) SUPP. 4 S.C.R. 
A 
HELD: 1.1. The present case is clearly and merely a case of adjustment 
of distribution of assets of the firm in regard to share of the appellant on its 
dissolution and as such no transfer of property was involved in it If there is 
a sale or transfer of assets by the assessee t~ a person, the position would be 
_different. Since a partner in a firm has no exclusive right on any property of 
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the firm, he cannot transfer the property. But upon dissolution of a firm, 
B allotment or adjustment of the assets takes place. Hence, there was no element 
of transfer in such a case. (14-C; 10-FJ 
1.2. Thus the High Court committed an error in answering the question 
in favour of the Revenue and agains! the assessee. The judgment of the High 
C Court is set aside and the order of the Tribunal is upheld. 114-FJ 
Commissioner of Gift Tax v. N.S. Getti Chettiar, (1971) 82 ITR 599 SC; 
Malabar Fisheries Co. v. Commissioner of Income Tax, Kera/a, (1979) 120 
ITR 49 SC; Commissioner of Income Tax, Madhya Pradesh, Nagpur and 
Shandra v. Dewas Cine Corporation, (1968) 68 ITR 240 SC; CITv. Bankey 
D Lal Vaidya, (1971) 79 ITR 594 SC; Addi. C!Tv. Mohanbhai Pamabhai, (1987) 
165 ITR 166 SC and CED v. Kantilal Trikamlal, (1976) 105 ITR 92 SC, relied 
on. 
CGTv. Chhotalal Mohan/al, (1987) 166 ITR 124 SC; MK. Kuppuraj v. 
E CGT, (1985) 153 ITR484 Mad. and CGTv. Premji TrikamjiJobanputra, (1982) 
133 ITR 317 Born., distinguished. 
F 
G 
Commissioner of Income-tax v. Keshavlal Lallubhai Patel, (1965) 2 SCR 
100 = 55 ITR 637 SC and Addanki Narayanappa and Anr. v. Bhaskara 
·, 
Krishnappti, AIR (1966) SC 1300, referred to. 
2. The words and expressions defined in one statute as judicially 
interpreted do not afford a guide to construction of the same words or 
expressions in another. statute unless both the statutes are para-materia 
legislations or it is specifically so provided in one statute to give the same 
meaning to the words as defined in other statute. 113-A] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 313 7 of 1995. 
From the Judgment and Order dated 25.4.88 of the Andhra Pradesh High 
Court in R.C. No. 254 of 1982. 
H 
A. Subba Rao for the Appellant. 
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SRI JAGATRAM AHUJA v.COMMR. OF GIFT TAX [SHJVARAJ V. PATIL, J.] 
3 
M.L. Verma and S. Rajappa for the Respondent. 
A 
The Judgment of the Court was delivered by 
SHIVARAJ V. PATIL J. This appeal is by the assessee against the 
judgment and order dated 25.4.1988 passed by the Division Bench of the High 
Court of Andhra Pradesh. It relates to the assessment year 1972-73. 
B 
The Income-tax App
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