1983 (8) TMI 121 - AT - Income Tax

Summary

Issues:
Interpretation of provisions under sections 18A of the Gift Tax Act and 50A of the Estate Duty Act regarding deduction of stamp duty paid on gift deed from gift tax payable.

Analysis:
The case involved an appeal by the Revenue against the order passed by the Appellate CED concerning the deduction of stamp duty paid on a gift deed from the gift tax payable. The deceased made a gift of cash and property, and the accountable person claimed a deduction of the entire gift tax amount paid. The Asst. CED allowed a deduction only to the extent of the gift tax amount paid, not the total gift tax payable.

On appeal, the Appellate CED relied on a previous case and allowed the deduction claimed by the accountable person. The Revenue contested this decision, arguing that the deduction under section 50A of the Estate Duty Act is based on gift tax paid, not gift tax payable. They also highlighted that there is no provision for deduction of stamp duty under section 50A.

The accountable person argued that the stamp duty paid should be deductible, citing the provisions of section 18A of the Gift Tax Act. This section allows for a deduction of stamp duty paid on the gift deed from the gift tax payable. The Tribunal analyzed both provisions, emphasizing that under section 50A, the deduction is based on gift tax paid, not gift tax payable. Therefore, the Asst. CED was correct in allowing the deduction based on the gift tax amount paid after considering the stamp duty paid.

Additionally, the Tribunal distinguished a previous case where it was held that the deduction under section 50A is based on the entire amount assessed and paid as gift tax, not a reduced amount. This further supported the Tribunal's decision to set aside the Appellate CED's order and uphold the Asst. CED's decision.

In conclusion, the Tribunal held that the Appellate CED was not justified in allowing the deduction of the total gift tax payable. The appeal by the Revenue was allowed, and the order of the Appellate CED was set aside, restoring the decision of the Asst. CED.