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TMI Blog1989 (11) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 understood that the transferor shall not derive any benefit direct or in direct under any circumstances from the said property and the transferor relinquishes all rights and benefits that may be consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 dt. 14th April, 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 asst. yrs. 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 that the assessee exercised her right of revocation in July, 1989, and from the asst. yr. 1989-90 the assessee only had included these asses as part of her wealth. Dr. Gowri Shankar argued that simply because the transaction involves transfer it does not necessarily amount to a gift and to strengthen this propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 GT 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 gift-tax 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 GT Act. Unless such a definition is there in the GT Act a revocable gift should not be taken to be a gift at all, as ordinarily gift is ways an irrevocable gift. Since in this case the gift is revocable after certain period, namely 74 months, such a gift should be taken to have not been comprehended under the GT Act and, therefore, the present gift is not at all taxable under the Gift-tax provisions. Further, the learned advocate argued that in order to explain the provisions of s. 4(5) of the WT Act the word irrevocable transfer was defined in the Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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 s. 4, Explanation, of the WT 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 GT 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 s. 6(2) of the GT Act. In our opinion it is enough if the period of revocation is specified in the deed of gift. That period may be any specified period like one year or two years or three years and so on. Further, s. 126 of the Transfer of property Act cannot be applicable to a question which arises under the GT Act. At page 480 of (1974) 95 ITR 476 (Bom), the essentials to be seen before deciding whether there is any gift involved in a transaction or not, are held to be as follows: "What the court must, therefore, see for the purpose of deciding wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d divested herself of the jewellery in favour of the donee alteast for 74 months. Therefore, it comes under a gift revocable after a certain period and it falls under s. 6(2) of the GT Act and hence the value of such gift should be computed according to the terms of r.11 of the GT Rules. Dr. Gowri Shankar argued that assuming without admitting that his argument, i.e., there was no gift involved in the transaction is not accepted by us and assuming that we hold that the transaction falls under s. 6(2) and the value of the gift should be determined according to r. 11 of the GT Rules, since no income is derived from the jewellery during the period of 74 months during which the donee-company held the said assets and since the computation of the value of the gift can be made on the basis of the capitalised value of the income from such assets during the period for which the gift is not revocable, that means in this case 74 months, there is no income in order to capitalise and in those circumstances the value of the gift should be determined at nil. We consider that this is not the stage where the value of the gift can be determined. Since we found that none of the lower authorities appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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