1981 (6) TMI 95 - AT - Income Tax

Summary

Issues:
Gift-tax assessments for asst. yrs. 1971-72 to 1975-76 based on concession in rental value for property owned by the assessee.

Analysis:

The appeals before the Appellate Tribunal ITAT MADRAS-B arose from the AAC's common order regarding gift-tax assessments for asst. yrs. 1971-72 to 1975-76 concerning a property owned by the assessee in Madras. The property comprised a Kalyanamandapam with shops and rooms, leased to M/s. Vasudevan & Co. The Gift Tax Officer (GTO) considered the difference between the property income and rent received as a taxable gift. The AAC allowed the appeals, disputing the concession claimed by the GTO. The Department contended that the concession constituted a gift under the GT Act. Additional grounds were filed for enhancement of assessments for certain years due to lease renewals. The Department argued that the concession amount should be included as a gift. The assessee's counsel maintained that there was no concession, citing the income from the property and the lessee's accounts to support their stance.

Upon careful review, the Tribunal observed that the property was partly leased to strangers and partly to M/s. Vasudevan & Co. The GTO alleged a concession, which, if present, would constitute a gift under the GT law. The Tribunal noted that the taxable events occurred on specific dates and assessed the lease agreements for those years. It was determined that for certain years, the lease agreements implied concessions, falling under inadequate consideration as per s. 4(1)(a) of the GT Act. The Tribunal disagreed with the GTO's valuation of the property at Rs. 24,000, determining a lower rental value based on various factors. The Tribunal restored the gift-tax assessment for one year, dismissed appeals for other years, and granted relief for a specific year based on lease renewal terms.

In conclusion, the Tribunal dismissed appeals for certain years, allowed the Department's appeal for one year, and granted relief for another year based on the valuation of concessions in rental values for the property owned by the assessee.