9911796707
|
Home
Issues:
1. Whether the transfer of shares by the assessee to the daughter of the Karta can be considered a gift under the Gift Tax Act. 2. Whether exemption under section 5(1)(vii) of the Gift Tax Act is applicable to the transfer. Analysis: The appeal before the Appellate Tribunal ITAT Ahmedabad-C involved the transfer of shares by the Karta of the assessee HUF to his daughter, claimed to be on the occasion of her marriage. The main contention was whether the transfer constituted a gift under the Gift Tax Act and if exemption under section 5(1)(vii) of the Act applied. The Gift Tax Officer (GTO) initially rejected the claim of exemption due to a time gap between the marriage and the transfer. The Deputy Commissioner upheld this decision, relying on precedent but did not address the issue of whether the transfer was a taxable gift. The Tribunal had to decide on both grounds raised by the assessee. Regarding the argument that the transfer was not a taxable gift, the assessee's representative cited the definition of 'gift' under the Act and argued that the transfer was not voluntary as it was the duty of the HUF to provide for the daughter's marriage expenses. Precedents from Calcutta and Andhra Pradesh High Courts were referenced to support this claim. The representative explained the time gap by citing the mother-in-law's death and asserted that the gift was made on the occasion of marriage, despite the delay. The Departmental Representative countered, emphasizing the lack of voluntariness and the absence of a direct nexus between the marriage and the gift. The representative also argued that the exemption under section 5(1)(vii) did not apply due to specific language limitations. The Tribunal analyzed the definition of 'gift' and the requirement of voluntariness. It distinguished between the timing of a gift and the occasion for the transaction, stating that the marriage need not coincide with the exact timing of the gift for it to be considered on the occasion of marriage. Citing Supreme Court and Calcutta High Court precedents, the Tribunal concluded that the obligation of an HUF to provide for marriage expenses could extend beyond the actual ceremony. The Tribunal found the reasons for the time gap reasonable and rejected the argument that only ornaments could be given as gifts, allowing for shares to be transferred. The Tribunal held that since the transaction was not a gift as per the Act's definition, it could not be taxed under the Gift Tax Act, thereby allowing the appeal.
|
