9911796707
|
Home
Issues:
- Appeal by revenue challenging AAC's action of setting aside assessment valuation. - Cross-objection by assessee seeking annulment of gift-tax assessment. - Interpretation of sections 11, 12, 45(e), and 80G of the Income-tax Act. - Validity of valuation method applied by GTO for shares sold by the assessee-trust. - Whether the assessee-trust is exempt from gift-tax under section 45(e) due to its status as a charitable trust. Analysis: The judgment pertains to an appeal by the revenue and a cross-objection by the assessee under the Gift-tax Act, 1958 for the assessment year 1974-75. The revenue contested the AAC's decision to set aside the assessment valuation based on a Supreme Court decision. The assessee, a charitable trust, initially supported the AAC's decision but later raised a legal plea that as a recognized charitable trust under the Income-tax Act, it is exempt from gift-tax under section 45(e) of the Act. This new contention was permitted by the Tribunal for consideration. The assessment involved the sale of shares by the assessee-trust, which were valued by the Valuation Officer under section 55A of the Income-tax Act. The GTO assessed the difference between the fair market value and the actual sale price as capital gains and deemed gift, subjecting it to income and gift tax. The AAC set aside the assessment, directing a fresh valuation based on Supreme Court principles, which led to appeals by both the revenue and the assessee. The revenue argued that similar cases within the Oswal group had valuation issues restored to the GTO and sought to keep the matter alive. In contrast, the assessee's counsel contended that the assessee-trust, being exempt under section 80G of the Income-tax Act, should not be liable for gift-tax. The Tribunal, after considering the provisions of sections 11, 12, 45(e), and 80G, along with the exemption certificate, concluded that the gift-tax assessment should be annulled due to the assessee's charitable trust status. The Tribunal found that section 45(e) exempted institutions or funds whose income is tax-exempt under sections 11 or 12 of the Income-tax Act from gift-tax liability. As the assessee-trust enjoyed exemption under section 80G and met the criteria of section 45(e), the gift-tax assessment was annulled. Despite the new legal argument raised by the assessee, which was not presented before lower authorities, the Tribunal admitted and upheld it, leading to the annulment of the GTO's order. In conclusion, the Tribunal dismissed the revenue's appeal and allowed the assessee's cross-objection, annulling the gift-tax assessment based on the charitable trust's exemption under section 45(e) and section 80G of the Income-tax Act.
|
