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TMI Blog1989 (12) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... seventy-four months from the date of transfer. (ii) If however the transfer is not revoked within three months after the expiry of the said period of seventy-four months for any reason whatsoever, the power of revocation will lapse. (iii) During the said period of seventy-four months the transfer shall be irrevocable and the transferor will have no right, title or interest whatsoever in or upon the said property consisting of 27 items and the transferee only should own and enjoy the said property as absolute owner and also deal with the same in the manner it may like. (iv) The transferee is bound to return the said property (27 items) as soon as the transferor revokes the transfer. (v) The notice of revocation of the transfer shall be given by the transferor in writing to the registered address of the transferee and that shall be treated as a valid service. (vi) The transferee is bound to keep the schedule property in the same state as far as practicable in which the said property is found at the time of transfer provided always that the transferee had the powers to change, alter or remake the said property or ornaments made weight by weight or otherwise. (vii) It is expressly unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held to be the value of the jewellery gifted by the assessee. He specifically stated in his impugned order that in view of his finding that the gift is void he is not dealing with either the valuation of the gift or the applicability of section 6 of the Gift-tax Act and Rule 11 of the Gift-tax Rules. 4. As against the impugned order the Revenue came up in second appeal before this Tribunal. We have heard Shri Anil Kumar, the learned departmental representative and Dr. Gowri Shankar, the learned advocate for the assessee. It is admitted before us that the donor (assessee) along with her husband and her husband's brother are the directors and shareholders of the donee company, M/s. M L Investments Pvt. Ltd. Dr. Gowri Shankar did not dispute that there is a transfer involved in this transaction evidenced by the letter dated 12-4-1982, which is already adverted to supra. His contention, however, is that the transfer does not amount to gift. It is also submitted before us that for the assessment years 1984-85 and 1986-87 the donee was showing these assets (27 items of jewellery) as part of its wealth in its wealth-tax returns filed for those assessment years. It is also submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dian Trusts Act show, not an essential feature of a trust under the law of trusts. That is why, as already stated earlier, there is no provision to be found in section 6, or in any other provision of the Gift-tax Act, for a gift with an unrestricted power of revocation; and that is also the reason why section 6(2) of the Act deals only with a situation in which there is a complete divestment at least for a limited period and tolerates a gratuitous transfer which is irrevocable for a limited time within the concept of a gift under the Gift-tax Act ". Dr. Gowri Shankar argued that there can be revocable transfer, revocable gift after some time and there can be irrevocable gift. However, under the ordinary acceptation of the term ' gift ' a transfer should be irrevocable. So for purposes of gifttax also a revocable transfer cannot be taken to be a gift. There must be compelling words in the statute to show that a revocable gift after some time also comes within the definition of gift under the Gift-tax Act. Unless such a definition is there in the Gift-tax Act a revocable gift should not be taken to be a gift at all, as ordinarily gift is always an irrevocable gift. Since in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... language of section 6(2) of the Gift-tax Act the whole argument of Dr. Gowri Shankar that revocable gift of any sort cannot be taken to be gift for purposes of Gift-tax Act especially in the absence of a definition of irrevocable transfer, just like the one which is available under section 4(4) Explanation (b) of the Wealth-tax Act, seems to us to be not tenable. In our opinion the Parliament is definitely aware of revocable gifts or transfers of different varieties as well as in-evocable gifts or transfers. Out of revocable gifts of many sorts, the Legislature in its wisdom thought it fit to choose only revocable gifts after a specified period for purposes of levy of gift-tax. In the absence of definition of ' irrevocable transfer ' just like the one available under section 4 Explanation of the Wealth-tax Act for purposes of gift-tax even if a gift is revocable after any specified period, which is not necessarily over a period of more than six years is also a gift within the meaning of the Gift-tax Act. For instance a gift which is revocable after a period of one year, in our understanding is a taxable gift within the meaning of section 6(2) of the Gift-tax Act. In our opinion it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y as it likes which included the power of converting one type of gold ornament into another. The donor under the terms of the gift deed is entitled to exercise her right of revocation only within the period of 3 months soon after the expiry of 74 months period during which the gift is irrevocable. If she fails to revoke the gift within a period of three months after the expiry of 74 months then the gift would become absolute. Having regard to the abovesaid essential features of the gift document we have to hold that this is a gift of jewellery under which the donor had divested herself of the jewellery in favour of the donee at least for 74 months. Therefore it comes under a gift revocable after a certain period and it falls under section 6(2) of the Gift-tax Act and hence the value of such gift should be computed according to the terms of rule 11 of the Gift-tax Rules. Dr. Gowri Shankar argued that assuming without admitting his argument that there was no gift involved in the transaction is not accepted by us and assuming that we hold that the transaction falls under section 6(2) and the value of the gift should be determined according to rule 11 of the Gift-tax Rules since no inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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