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Issues:
1. Determination of taxability of gifts under the Gift-tax Act, 1958 based on release deeds in trust. 2. Interpretation of the term "gift" under section 2(xii) of the Act. 3. Analysis of legal precedents regarding release deeds and their classification as gifts. 4. Application of the Indian Trusts Act, 1882 in the context of beneficiary rights and trustee obligations. The judgment pertains to three Miscellaneous Civil Cases involving the taxability of gifts under the Gift-tax Act, 1958 based on release deeds in a trust. The cases were heard analogously due to the similarity in the questions raised. The primary issue revolved around whether the release deeds made by beneficiaries constituted taxable gifts under the Act. The court analyzed the provisions of section 2(xii) of the Act, which defines a gift as the voluntary transfer of property without consideration. The court considered the release deeds in question and their implications on tax liability. In the first case (Miscellaneous Civil Case No. 41 of 1987), the court examined a release deed dated November 12, 1973, where a beneficiary released her interest in trust properties to other beneficiaries. The court held that this release did not amount to a taxable gift under the Gift-tax Act. The decision was based on the legal position that the beneficiary's right against the trustee was released, which did not fall within the definition of a gift as per the Act. The court relied on legal precedents to support its decision, emphasizing that the transaction did not meet the criteria for taxation under the Act. In the second case (Miscellaneous Civil Case No. 200 of 1987), the court considered a similar release deed dated March 28, 1973, and concluded that it also did not constitute a taxable gift under the Gift-tax Act. The court disagreed with the Tribunal's decision and ruled in favor of the assessee, highlighting that the release deed did not meet the requirements for taxation as defined in the Act. The court's analysis focused on the nature of the transaction and its alignment with the legal provisions governing gifts. Regarding the third case (Miscellaneous Civil Case No. 44 of 1989), which involved the determination of a 1/4th share in the trust property, the court deemed the question irrelevant in light of its decisions in the previous cases. The court reiterated that the release deeds did not qualify as taxable gifts, rendering the issue of the share moot. The court, therefore, ruled in favor of the assessee in this case as well, emphasizing the non-taxable nature of the transactions based on the legal framework and precedents cited. In conclusion, the court held that the release deeds made by the beneficiaries in the trust did not amount to taxable gifts under the Gift-tax Act, 1958. The court's analysis focused on the legal definitions of gifts, beneficiary rights, and trustee obligations under the Indian Trusts Act, 1882. The judgment provided a detailed explanation of the legal reasoning behind the decisions in each case and clarified the non-taxable status of the transactions in question.
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