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Issues:
1. Interpretation of section 5(1)(ii) of the Gift-tax Act, 1958 regarding exemption for gifts made outside India. 2. Determining whether the gift was completed in India or outside India. 3. Analysis of the role of the post office as an agent in completing the gift transaction. 4. Comparison with relevant case laws to establish principles governing gifts made from outside India. Detailed Analysis: 1. The primary issue in this case revolves around the interpretation of section 5(1)(ii) of the Gift-tax Act, 1958, which provides an exemption for gifts made by individuals of movable property situated outside India. The question raised was whether the gifts made by the assessee, a non-resident and non-citizen of India, to his wife in India through drafts purchased abroad qualify for exemption under this provision. 2. The contention of the Department was that the gift was completed in India as the draft was accepted by the donee in India, thereby making the movable property situated in India at the time of completion. The Gift-tax Officer rejected the exemption claim based on this argument. However, the Appellate Assistant Commissioner and the Tribunal ruled in favor of the assessee, citing earlier decisions supporting exemption for gifts made from outside India. 3. The role of the post office as an agent in completing the gift transaction was a crucial point of contention. The Department argued that since there was no evidence of the donee's express or implied request for the gift to be sent through the post office, the exemption should not apply. The absence of such a request would imply that the post office did not act as an agent of the donee, leading to the completion of the gift in India. 4. To establish principles governing gifts made from outside India, the court referred to relevant case laws such as Rajkumar Mills Ltd. v. CIT and A. J. Gomes v. CGT. These cases highlighted the significance of the mode of remittance and the presence of prior agreements between the parties in determining the completion of the gift outside India. The court emphasized the need for evidence regarding any prior contract between the parties to ascertain the role of the post office as an agent in completing the gift transaction. In conclusion, the court directed the Tribunal to investigate whether there was any prior contract between the parties regarding the mode of remittance and the role of the post office in completing the gift transaction. The court emphasized the importance of establishing the donee's desire or intention in the gift transaction to determine the applicability of the exemption under section 5(1)(ii) of the Gift-tax Act, 1958.
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