9911796707
TMI Blog2013 (1) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... of law:- "Whether, on the facts and in the circumstances of the case, the ITAT was right in law in quashing the gift-tax assessment in the assessee's case." 3. The High Court set aside the order of the Income Tax Appellate Tribunal (the Tribunal) and held in favour of the Commissioner of Gift Tax by upholding the assessment order. It is in these circumstances that the assessee is now before us. 4. For convenience, we refer to the facts in the case of Satya Nand Munjal. The facts: 5. On 20th February 1982 the assessee, being the absolute owner of 6000 fully paid up equity shares of the face value of Rs. 25 each of M/s Hero Cycles (P) Ltd. executed a deed of revocable transfer in favour of M/s Yogesh Chandra and Brothers Associates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 17th February 1987 in respect of the assessee. He held that the revocable transaction entered into by the assessee was only for the purpose of reducing the tax liability. As such, it could not be accepted as a valid gift. For arriving at this conclusion, the assessing officer relied upon McDowell & Co. v. Commercial Tax Officer, [1985] 154 ITR 148. Accordingly, the assessing officer, while holding the gift to be void, made the assessment on a protective basis. 10. Feeling aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Gift Tax (Appeals) but found no success. The Commissioner of Gift Tax (Appeals), however, held that since the gift was void, a protective assessment could not be made. 11. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade with the purpose of saving on payment of wealth-tax, it needs to be ignored." 14. The position as it stood, therefore, was that the revocable gift made by the assessee was held to be a valid gift and the assessee was liable to pay gift tax on the value of the gift as determined under Rule 11 of the Gift Tax Rules, 1958. Assessment proceedings for AY 1989-90: 15. All of a sudden, on 30th January 1996 the Gift Tax Officer issued a notice to the assessee under Section 16(1) of the Act to the effect that for the Assessment Year 1989-90 the gift made by the assessee was chargeable to gift tax and that it had escaped assessment for that Assessment Year. The assessee responded to the notice by simply stating that there is no gift tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the bonus shares. The Commissioner also referred to McDowell & Co. and held that the assessee had carefully planned his affairs in such a manner as to deprive the Revenue of a substantial amount of gift tax. The reassessment order was accordingly upheld. 19. The assessee then took up the matter with the Tribunal which held in its order dated 23rd May 2000 that in view of the assessment to gift tax made in respect of the assessee for the Assessment Year 1982-83, the notice issued under Section 16(1) of the Act was merely a change of opinion and, as such the reassessment proceedings could not have been taken up. On the merits of the case, it was noted that neither the dividend income on the bonus shares nor their value had been taxed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son, the value of the release, discharge, surrender, forfeiture or abandonment to the extent to which it has not been found to the satisfaction of the Assessing Officer to have been bona fide, shall be deemed to be a gift made by the person responsible for the release, discharge, surrender, forfeiture or abandonment; (d) to (e) xxx" 24. A perusal of the impugned judgment and order facially indicates that there has been no consideration of the provisions of Section 4(1)(c) of the Act. From the rather elaborate narration of facts, it is quite clear that the assessee had made a valid revocable gift of 6000 equity shares in the company on 20th February 1982 to the transferee. This is a finding of fact conclusively determined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that question would arise (if at all) only after a finding is given by the High Court on the first part of Section 4(1)(c) of the Act. But, as we have noted above, the High Court has not considered the interpretation of Section 4(1)(c) of the Act. 28. Under the circumstances we have no option but remand the matter for de novo consideration by the High Court keeping in mind the provisions of Section 4(1)(c) of the Act as well as the orders passed in the case of the assessee for the Assessment Year 1982-83. We do so accordingly. 29. In view of the above, both the Civil Appeals are allowed and the impugned judgment and order of the High Court is set aside but without any order as to costs. 30. We make it clear that the parties are entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
