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TMI Blog2017 (3) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... in concluding that the assessee had acquired a capital asset by way of gift. The Tribunal's decision to restore the matter to the file of the Assessing Officer is not justifiable as it seems to have been influenced by deeming provision in the definition of a Gift under the Gift Tax Act. In Neville Wadia (1972 (9) TMI 20 - BOMBAY High Court ), the revenue contended that the operative words in the release of deed constituted transfer of life interest by the assessee in favour of his daughter and son. The contention was negatived by this Court. This Court held that whatever came to the daughter and son of the assessee in that case (the son being the assessee in the present reference) was a result of provisions made in their favour as beneficiaries under the original deed of settlement dated 30th January, 1947 and that by use of the words in the operative clause did not create any interest in favour of the daughter and the son of the assessee and the operative portion of the deed gave Neville Wadia complete release and discharged the trustees from all obligations against them and it was impossible to construe the deed to hold that it was deed of transfer of the life estate of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , interest and income of the settlor for his life. After the death of said Neville Ness Wadia, the property is to be divided into two equal shares and held by another Trust. (b) On 30th March, 1957, Mr. Neville Wadia relinquished his life interest in the Trust and life interest in the property belonging to the Trust. This on the ground that it did not amount towards transfer. The aforesaid issue was challenged in appeal before the authorities under the Act and finally referred to this Court by the Tribunal. This Court in the above Reference at the instance of the respondent Revenue in Commissioner of Income Tax Vs. Neville Ness Wadia, [90 ITR 155] held that surrendering of life interest by the assessee would not amount to transfer of property to his children so as to attract the provisions of Section 16(3) (a)(iii) of the Indian Income Tax Act, 1922. (c) During the previous year relevant to assessment year 1984-85 the respondent assessee sold his life interest in the income from the property of the Trust under an Agreement dated 19th March, 1984 to M/s. Kapadia Trading Co. Ltd. and Anr. for consideration of ₹ 21.70 lakhs. The respondent assessee too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, there is no transfer as held by our Court in Neville Wadia (supra). Thus, it is admittedly not a gift under Section 49(1)(ii) of the Act. (d) The definition of a Gift under the Gift Tax Act will not be applicable to proceedings under the Income Tax Act. In Gift Tax definition of word Gift also includes deemed gift where a consideration paid is lower than the consideration payable and the balance is considered to be a deemed gift. The concept of deemed gift is not available under the Income Tax Act, 1961. In support, reliance is placed upon the decision of the Supreme Court in Khoday Distilleries Ltd vs. Commissioner of Income Tax Anr [307 ITR 312] . (e) Even if the definition of Gift as provided under the Gift Tax Act is applied, the sine qua non for the same is for transfer from one person to another of any existing movable or immovable property. In this case, there is no transfer by one person to another. Neville Wadia merely relinquished his life interest in the property. Thus, the occasion to apply the cost to the previous owner of the life interest, in this case, the father, would not arise. (f) In any event, the cost of acquisition to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donee who would accept the gift and acceptance is the relevant factor to be considered in the present case. 5. In the present case he submitted that there is no transfer from one person to the other and by virtue of the operation of Trust Deed read with the deed of release, Neville N Wadia while executing the deed of release dated 30th March, 1957 had merely released and discharged the trustees of the Trust Fund. Mr. Agarwal submitted that the expression 'Gift' was not defined in the Act. He also invited our attention to the definition of Gift under the Transfer of Property Act, 1882 which defines Gift in Section 122 of the Act as follows : Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. 6. Mr. Agarwal submitted that although Gift was defined in the Gift Tax Act, the said definition could not be used in the present case since the assessee has not played any active part in receiving the benefits of the release of life interest by Neville N. Wadia. Mr. Agarwal relied upon the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in clause (d) of Section 2(xxiv) of the Gift Tax Act had come up for consideration before the Supreme Court in the case of Goli Eswariah's case [(1970) 76 ITR 675] wherein the Supreme Court took a view that the words transaction entered into contemplated in Section 2(xxiv)(d) of the Gift Tax Act cannot apply to a unilateral act. The act must be one to which two or more persons are parties. 9. The Court found that in the case of Lubimoff (supra) also the deed of release or relinquishment or surrender was executed by Mrs. Jer Mavis Lubimoff alone and nobody else was a party, much less the daughter. Such a unilateral document was not a transfer of property within the meaning of Section 2(xxiv) of the Gift Tax Act 1958 and not a gift within the meaning of Section 2(xii) of the said Act. 10. The Court also considered contention of the Revenue that the transaction was a Gift under the provision of Section 4(1)(c) of the Gift Tax Act and after considering the same observed that the answer to such a question would depend as to the whether Gift Tax Officer was satisfied that the deed of release had been found not to be bonafide. In that case, the Tribunal had found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefor. 13. Considering the controversy at hand we have examined the various definitions of the expression gift as set out below; (a) Gift is defined under Section 2(xii) of the Gift Tax Act as under : Gift means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or moneys worth and includes the transfer or conversion of any property referred to viz. Sect. 4, deemed to be gift under that section . (b) the Transfer of Property Act, 1882 which defines Gift in Section 122 of the Act as follows :- Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. (c) Black's Law Dictionary defines gift as :- The voluntary transfer of property to another without compensation. (d) The plain dictionary meaning of 'Gift' as given in the Oxford Dictionary is:- A thing given willingly to someone without payment. 14. Having considered the various definitions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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