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TMI Blog2005 (8) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... sh amount of more than Rs. 1,00,000 in the State of Jammu and Kashmir and claimed exemption in respect of the said transaction. The High Court held that he was entitled to get the exemption and the gift was not taxable under the provisions of the Act. The ratio of this judgment in our view, is squarely applicable to the facts of the present case. In the result, the submissions made by Revenue cannot be accepted. The order passed by the Income-tax Appellate Tribunal and the Deputy Commissioner of Income-tax (Appeals) is, therefore, confirmed. The appeal is accordingly dismissed - - - - - Dated:- 2-8-2005 - Judge(s) : S.S. PARKAR., V. M. KANADE. JUDGMENT The judgment of the court was delivered by V.M. Kanade J- The Revenue has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal, Panaji Bench. The Tribunal confirmed the findings recorded by the Deputy Commissioner of Income-tax (Appeals) and dismissed the appeal filed by the Revenue. Against the aforesaid two orders, the present appeal has been filed which was admitted by this court on June 24, 2002, on the following substantial questions of law: "B.- Whether, on the facts and in the circumstances of the case, the transaction of gift of Rs. 1,00,000 made by the assessee in Kashmir in favour of Smt. Madhuri Joshi, r/o Pune, amounts to a colourable device to avoid tax?" Learned counsel appearing on behalf of the appellant submitted that the aforesaid transaction of gift was a colourable transaction which had been resorted to solely for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel appearing on behalf of respondent No. 1, submitted that the question of law which was framed was not a substantial question of law. He submitted that whether a transaction amounts to a colourable device or not is a question of fact and since there was a concurrent finding given by the two lower authorities it was not open for the High Court to interfere with the concurrent finding of fact while exercising its jurisdiction under section 260A of the Income-tax Act. He relied on 3 judgments of the Supreme Court in support of the said submission. He further submitted that the judgment in the case of McDowell and Co. Ltd. v. CTO [1985] 154 ITR 148 (SC) had been overruled by the Supreme Court in the case of Union of India v. Azadi Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Indian who is permanently residing in Dubai. She had come to Kashmir and there she had issued a cheque in favour of Mrs. Madhuri Joshi for an amount of Rs. 1,00,000. Section 5, clause (ii) clearly contemplates a situation where a movable property situate outside Indian territory if it is gifted by a person who is not ordinarily residing in India is exempted from gift-tax. In our view, it cannot be said that the said transaction is a colourable device for the purpose of avoiding gift-tax. Respondent No. 1 being a resident of India could very well issue a cheque from Dubai and still she would not be liable to pay gift-tax and there is an exemption from payment of tax in Dubai. In the present case, the admitted position is that respondent N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Westminster's case [1936] AC 1 (HL); 19 TC 490 [68] and Fisher's Executors case [1926] AC 395 at 412 (HL), by saying (page 160 of [1985] 154 ITR) 'we think that the time has come for us to depart from the Westminster principle as emphatically as the British courts have done and to dissociate ourselves from the observations of Shah J., and similar observations made elsewhere', it does not appear that the rest of the learned judges of the Constitutional Bench contributed to this radical thinking. Speaking for the majority, Ranganath Mishra J. (as he then was) says in McDowell's case [1985] 154 ITR 148, 171 (SC): 'Tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t High Court also in the case of CGT v. Dipak A. Sheth [2002] 254 ITR 235 in an identical case has held that the Gift-tax Act extends to the whole of India except to the State of Jammu and Kashmir and if all the conditions necessary for claiming exemption under section 5(1)(ii) of the Act are fulfilled the assessee is entitled to get exemption. In the said case, the assessee who was not ordinarily resident in India had made a gift of cash amount of more than Rs. 1,00,000 in the State of Jammu and Kashmir and claimed exemption in respect of the said transaction. The High Court held that he was entitled to get the exemption and the gift was not taxable under the provisions of the Act. The ratio of this judgment in our view, is squarely applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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