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TMI Blog1981 (1) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 on 1-4-1975 and Rs. 50,000 on 16-8-1975. The assessee had more than Rs. 1 lakh in Aruna Trading Co., of which she was a partner. Her son-in-law was in debt with the same firm to the extent of Rs. 84,677. He was also a partner therein. An arrangement was evolved between the assessee, the donee and the firm, the effect of which was that the lady had donated Rs. 1 lakh to her son-in-law. In her own accounts, she debited her capital account and credited Aruna Trading Co. Aruna Trading Co. had debited her account and credited Shri Kannuswamy, her son-in-law, by the two amounts on the respective dates. Shri Kannuswamy also maintained accounts and he had made corresponding entries crediting himself and debiting the firm in his books by two a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extracts from a book by Shri C.A. Gulanikar suggesting that all that is required is that there should be a change of both ownership and possession of gifted property so as to avoid the application of section 4(5A). The learned departmental representative, on the other hand, pointed out that these decisions do not say that it applies only to invalid gifts. In fact, there is no need for such a provision for invalid gifts, because invalid gifts will be ignored. Section 4(5A) ensures that even valid gifts can be ignored for wealth-tax purposes. He pointed out that the explanatory notes on the provisions of the Taxation Laws (Amendment) Act, 1975, mentions that the provision is intended as a device to counter tax avoidance by means of entries in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gift. In fact it is not the contention of the learned departmental representative that there is no gift. He merely says that even a valid gift would get hit by section 4(5A). Section 4(5A) reads as under : "(5A) Where a gift of money from one person to another is made by means of entries in the books of account maintained by the person making the gift or by an individual or a Hindu undivided family or a firm or an association of persons or body of individuals with whom or which he has business or other relationship, the value of such gift shall be liable to be included in computing the net wealth of the person making the gift unless he proves to the satisfaction of the Wealth-tax Officer that the money has actually been delivered to the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances narrated in detail by us earlier, we find it extremely difficult to conclude that the facts in the present case relate to a gift made by book entries in the books of account of anyone of the parties mentioned under section 4(5A). We are satisfied that neither the letter nor the spirit of section 4(5A) can come in the way of our allowing this appeal. As pointed out by the learned departmental representative, section 4(5A) seeks to counter tax avoidance. Here is a case where the debt owed by the son-in-law to a firm is practically taken over by the donor without consideration and there is nothing to suggest that any tax avoidance is involved. We have merely to point out that the disputed assessment in the assessee's case merely take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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