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Issues:
1. Interpretation of section 24(2) of the Gift-tax Act, 1958 regarding the jurisdiction of the Commissioner of Gift-tax. 2. Determination of the validity of the order dated March 22, 1988, under section 24(2) of the Gift-tax Act, 1958 in light of the doctrine of merger. Analysis: The judgment delivered by the High Court of Kerala involved the interpretation of section 24(2) of the Gift-tax Act, 1958. The court addressed the first question raised by the Income-tax Appellate Tribunal regarding the jurisdiction of the Commissioner of Gift-tax to pass orders under this provision. The court emphasized that the power under section 24(2) is a revisional power, not an appellate power, and therefore, the doctrine of merger does not apply to such proceedings. The court concluded that the order passed by the Commissioner of Gift-tax on March 22, 1988, was not affected by the doctrine of merger, as it was a revisional order based on examining the record and not a continuation of the original proceedings. Moving on to the second issue raised by the Tribunal, the court examined the validity of the order dated March 22, 1988, in light of the doctrine of merger following the insertion of clause (c) of the Explanation to section 24(2) by the Finance Act, 1988. The court highlighted that the order in question was passed before the clause came into effect and, therefore, the doctrine of merger did not impact its validity. The court reiterated that the nature of the power under section 24(2) precludes the application of the doctrine of merger in such cases. The case involved a gift deed executed by an individual in favor of his daughter, leading to a gift-tax assessment. The court analyzed the claim of a liability of Rs. 1,15,000 made by the assessee, which was contested during the proceedings before the Gift-tax Officer and subsequently before the Commissioner of Gift-tax. The court noted discrepancies in the claim of liability and observed that the gift deed did not mention any such liability. The court also highlighted inconsistencies in the assessee's stand regarding the purpose of the gift and the claimed liability, leading to a rejection of the deduction claimed. The court further examined the evidence presented, including letters and joint affirmations, but ultimately concluded that the document itself did not support the claimed liability. The court emphasized the importance of the contents of the document in determining the nature of the gift for tax assessment purposes. Despite arguments regarding the joint affirmation by tenants, the court found the lack of reference to the liability in the gift deed to be conclusive. Consequently, the court upheld the decisions of the authorities and ruled in favor of the Revenue against the assessee on both questions raised by the Tribunal. In conclusion, the High Court of Kerala upheld the decisions of the lower authorities, emphasizing the importance of documentary evidence and the statutory provisions in gift-tax assessments. The court's detailed analysis and interpretation of the relevant legal provisions led to a ruling in favor of the Revenue in this case.
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