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Issues:
1. Gift-tax assessment cancellation for the assessment year 1971-72. 2. Adequacy of consideration for the transfer. Analysis: Issue 1: Gift-tax assessment cancellation for the assessment year 1971-72 The case involved the assessment of an individual for the assessment year 1971-72 under the Gift-tax Act, 1958. The original assessment was challenged by the Revenue due to an alleged escapement of gift-tax. The Gift-tax Officer assessed the individual based on the surrender of life interest in properties, resulting in a gift value of Rs. 2,85,935. The Appellate Assistant Commissioner found the valuation incorrect and held that there was no element of gift involved in the properties transferred. The Income-tax Appellate Tribunal upheld this decision, stating that the transaction was bona fide, approved by the court, and not subject to gift-tax. The High Court concurred with the Tribunal, emphasizing that the actuarial valuation and court approval supported the transaction's genuineness, leading to the dismissal of the Revenue's appeal. Issue 2: Adequacy of consideration for the transfer The adequacy of consideration for the transfer was a key point of contention. The Appellate Tribunal determined that the transfer was made for adequate consideration based on actuarial valuation and court approval. It held that Section 4(1)(a) of the Gift-tax Act was not applicable as the valuation was accurate and approved by the court. The High Court agreed with this finding, stating that the Tribunal's conclusion on the adequacy of consideration was a factual determination supported by the records. Consequently, the High Court rejected the Revenue's argument that the transfer was for inadequate consideration, emphasizing that no legal question arose from the Tribunal's order. As a result, both questions of law raised by the Revenue were answered against them, and no costs were awarded in the matter.
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