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Interpretation of a partition deed to determine if a gift or deemed gift was involved. Tribunal's authority to interfere with the assessment. Analysis: The case involved a dispute under the Gift-tax Act, 1958, regarding a partition deed and whether it constituted a gift or a deemed gift. The respondent, a legal heir, was assessed as a Hindu undivided family member but later relinquished her share in favor of other family members. The Gift-tax Officer held it to be a gift and levied tax, which was confirmed in appeal but overturned by the Tribunal, stating it was a partition, not a gift. The Revenue sought a reference to the High Court, questioning the Tribunal's decision and the involvement of gift tax. The Tribunal's decision was based on the interpretation of the partition deed's clauses, particularly clauses (8) and (9), which indicated a division among the family members without a specific share allotted to the respondent. The Tribunal found no transfer or gift in the arrangement, concluding it was a partition, not a gift. The Revenue contended that the relinquishment amounted to a deemed gift under section 4(1)(c) of the Gift-tax Act, citing the Supreme Court's decision on the matter. However, the Tribunal rejected this argument, emphasizing that the properties were jointly held and divided among family members as tarwad property. The High Court, after reviewing the clauses of the partition deed and the Tribunal's findings, upheld the Tribunal's decision, stating that no error of law was found. The High Court emphasized that for section 4(1)(c) to apply, the abandonment must not be bona fide, which was not the case here. Therefore, the High Court dismissed the original petition, ruling that the relinquishment did not constitute a gift or a deemed gift, and declined to refer the questions of law to the Appellate Tribunal. In conclusion, the High Court found the Tribunal's decision to be legally sound, as the partition deed did not evidence a gift or a deemed gift. The High Court's analysis focused on the clauses of the deed, the nature of the transaction, and the absence of any finding that the abandonment was not bona fide. The judgment clarified the distinction between a partition and a gift under the Gift-tax Act, ultimately upholding the Tribunal's decision and dismissing the Revenue's petition.
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