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Valuation of gifted immovable property for gift-tax purposes. Analysis: The main issue in this gift-tax appeal was the valuation of the market value of the gift in the form of immovable property. The appellant disclosed the total value of the gift at Rs. 8,000, but the Gift Tax Officer (GTO) determined the gross value of the gift at Rs. 3,59,460 based on various factors, including the sale of the property by the donees at Rs. 6,000 per acre to 10 persons and the valuation by registration authorities at Rs. 6,000 to Rs. 8,000 per acre. The appellant argued that the value of Rs. 6,000 shown against Rs. 4,100 (the cost of acquisition) was just and proper, emphasizing that the property was vested in the donees within three months of acquisition by the donor. The legal aspect of the transaction was analyzed concerning the registration of the gift deed for immovable property. The appellant's counsel argued that registration was not a prerequisite for a valid gift under the Gift Tax Act, citing relevant case law. The Tribunal reviewed the definitions of "gift" and "transfer of property" under the Gift Tax Act, noting that registration of a gift deed is not mandatory for a gift to be valid for gift tax purposes. The Tribunal considered the requirement of a transfer of property voluntarily and without consideration as essential for a gift, emphasizing that non-registration or non-execution of a document does not render a gift invalid. Regarding the valuation of the gifted property, the Tribunal found discrepancies in the valuation adopted by the authorities below. While acknowledging the rise in property cost over time, the Tribunal noted the lack of proper investigation into the escalation of cost by the authorities. After considering all relevant factors, including the cost of acquisition, the date of the gift document, and subsequent sales by the donees, the Tribunal determined the value of the lands at Rs. 32,800, significantly lower than the initial valuation of Rs. 3,59,460. In conclusion, the Tribunal partly allowed the appeal, determining the value of the gifted property at Rs. 32,800, contrasting with the initial valuation of Rs. 3,59,460. The judgment emphasized the importance of considering all relevant factors and proper investigation into valuation discrepancies in gift-tax matters involving immovable property.
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