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Issues:
1. Deductibility of the sum of Rs. 60,000 from the total value of the gifts for gift-tax assessment. Analysis: The case involved the assessment of gift-tax for the assessment year 1960-61, where the assessee had gifted properties to his sons through deeds of gifts. The deeds contained recitals requiring the donees to pay Rs. 20,000 each. The Gift-tax Officer initially rejected the deduction of Rs. 60,000 from the total value of the gifts. The Appellate Assistant Commissioner upheld this decision, stating that the personal liability of the donees did not affect the market value of the gifted properties. However, the Tribunal disagreed, holding that the amount of Rs. 60,000 should be deducted from the total valuation of the gifts, reducing it to Rs. 3,94,700. The main contention revolved around whether the provision for payment of Rs. 20,000 by each donee affected the market value of the gifted properties. The revenue's counsel argued that the deeds imposed only personal liability on the donees without affecting the value of the gifts. On the other hand, the assessee's advocate contended that the recitals in the deeds indicated an onerous gift or an obligation arising out of contract attached to the ownership of the properties. The Tribunal agreed that the amount of Rs. 20,000 should be deducted from the value of the properties gifted, considering it an onerous burden or an obligation affecting the market value. The judgment delved into the legal interpretation of the expression "subject to" in the deeds of gifts. It referred to legal principles stating that conditions subsequent, if unfulfilled, could put an end to the gift. However, in this case, the gift had already taken place, and the focus shifted to determining the value of the gifts. The court considered the absence of a defeasance clause and the specific recitals in the deeds requiring payment of Rs. 20,000 by the donees. It also referenced Section 40 of the Transfer of Property Act, indicating that the document could be construed as an onerous gift or an obligation affecting the property's market value. Ultimately, the High Court agreed with the Tribunal's decision, emphasizing that the deeds could be interpreted as onerous gifts or obligations attached to the properties, impacting their market value. Therefore, the court ruled in favor of deducting the sum of Rs. 60,000 from the total value of the gifts for gift-tax assessment.
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