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Issues involved:
Interpretation of gift of shares u/s 27(1) of the W.T. Act, 1957 for assessment year 1958-59. Judgment Details: The case involved a reference u/s 27(1) of the W.T. Act, 1957 regarding the exclusion of shares valued at Rs. 6,89,714 from the net wealth of the assessee for the assessment year 1958-59. The shares were gifted to the grandson of the assessee on 10th November, 1956, and a trust deed was executed on 8th July, 1957. The shares were registered in the name of the grandson in 1958, after the valuation date of 12th October, 1958. The issue was whether the shares should be included in the wealth of the assessee as the legal owner until registration. The WTO included the shares in the wealth, but the AAC and Tribunal excluded them based on the timing of the gift and trust deed vis-a-vis the valuation date. The AAC held that since the delivery of the shares was made to the trustees before the valuation date, the transfer was complete, and thus excluded the shares from the net wealth of the assessee. The Revenue appealed to the Tribunal, arguing that legal ownership remains with the assessee until registration of transfer. The Tribunal, considering the facts and relevant dates, concluded that the shares' value should not be included in the wealth of the assessee. The High Court referred to the decision of the Madras High Court and the Supreme Court, emphasizing the importance of proper transfer of shares as per the Companies Act for ownership. It was noted that the completion of gift and transfer before the valuation date was crucial. The Court also cited previous cases regarding gifts of movable properties and principles of transfer and acceptance. Ultimately, the Court agreed with the Tribunal's conclusion that the shares' value should not be included in the wealth of the assessee, answering the question in favor of the assessee. In conclusion, the Court upheld the Tribunal's decision, ruling in favor of the assessee and stating that the shares' value should not be included in the wealth. No costs were awarded in the case. Judge Suhas Chandra Sen concurred with the judgment.
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