1992 (6) TMI 95 - AT - Income Tax

Summary

Issues:
1. Whether the dedication of gold and silver articles by the assessee is chargeable as a gift under the Gift-tax Act.
2. Whether the property dedicated to the family deity remains with the assessee for wealth-tax assessment.

Issue 1:
The appeal before the Appellate Tribunal ITAT Pune concerned the revenue's challenge against the Commissioner-Gift Tax (Appeals) order regarding the chargeability of the dedication of gold and silver articles by the assessee as a gift under the Gift-tax Act. The departmental representative argued that the dedication should be considered a gift, while the counsel for the assessee contended that dedication to a family deity is a unilateral act and does not involve an offer and acceptance like in a gift transaction. The counsel relied on legal precedents to support the argument that dedication to a family deity does not amount to a gift under the Gift-tax Act. The Tribunal agreed with the assessee's argument, emphasizing that the act of dedication to a family deity is a unilateral act and does not constitute a transfer of property or a gift. The Tribunal cited relevant case law to support its decision and held that the property dedicated to the family deity did not remain with the assessee, leading to the dismissal of the revenue's appeal.

Issue 2:
In another appeal related to wealth-tax assessment, the Tribunal addressed whether the property dedicated to the family deity should be considered as part of the assessee's wealth. The Tribunal noted that the dedication of property to the family deity did not involve a transfer of property according to the Transfer of Property Act or the Gift-tax Act. The Tribunal highlighted that the appointment of a shebait to manage the family deity did not imply that the assessee retained rights and interest in the property post-dedication. The Tribunal emphasized that the property was held and possessed by the family deity through its shebaits, making it assessable in the hands of the deity as an individual. Citing a Supreme Court judgment, the Tribunal concluded that the property dedicated to the family deity should not be considered as belonging to the assessee for wealth-tax assessment purposes. Consequently, the Tribunal allowed the assessee's appeal, ruling in favor of excluding the dedicated property from wealth-tax assessment.

In conclusion, the Appellate Tribunal ITAT Pune upheld the assessee's position that the dedication of gold and silver articles to the family deity did not constitute a taxable gift under the Gift-tax Act and should not be included in the assessee's wealth for wealth-tax assessment purposes.