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TMI Blog1989 (12) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... o the remittance made by the assessee by way of drafts from the foreign country ? Are the gifts exigible to tax ? (b) Is the assessee entitled to the benefit of section 5(1)(ii) of the Gift-tax Act, 1958 ?" The respondent is the Revenue. We are concerned with the assessment years 1976-77, 1977-78, 1979-80 and 1980-81. The short question that arises for consideration in these cases is whether the gifts are exempted under section 5 (1) (ii) of the Gift-tax Act ? Section 5(1)(ii) of the Gift-tax Act is as follows: "5. Exemption in respect of certain gifts. - (1) Gift-tax shall not be charged under this Act in respect of gifts made by any person - . . . (ii) of movable property situate outside the said territories unless the person (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y an agent of the donee. Considered in the context of the relationship of husband and wife, between the donor and donee, the Appellate Assistant Commissioner further observed that the remittances as well as the mode of remittances are according to the previous understanding between the husband and wife. On these premises, he held that the gifts had taken place outside India and are exempt under section 5(1)(ii) of the Act. In the appeals filed by the Revenue, the Appellate Tribunal passed a common order dated December 16, 1984. Solely relying upon the communication sent by the representative, who appeared originally, dated February 16, 1981, the Tribunal held that it is crystal clear that the taxability of the gifts related to the deposits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee's representative in the first instance dated February 16, 1981, was due to oversight or a mistake. The Appellate Tribunal erred in overemphasising the said communication and treating it as nearly conclusive. A proper order of assessment should be made only on the basis of the facts and circumstances disclosed during the assessment proceedings and on a correct application of the relevant provisions of law. See CIT v. A. P. Parukutty Mooppilamma [1984] 149 ITR 131 (Ker). Turning to the facts of this case, the admitted facts are the following : The assessee is, admittedly, a non-resident during the relevant previous years. He was making remittances through banks to his wife who was resident in India. The remittances were dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ationship between the donor and the donee. The Appellate Tribunal should have, in accordance with the express finding of the Appellate Assistant Commissioner, that the remittances as well as the mode of the remittances were according to the prior understanding between the husband and wife and so effected by draft, found that as soon as the drafts were purchased and posted abroad, the gifts were complete when the envelopes were posted in the post office and were beyond the reach of the donor. The post office is only an agent of the donee the wife in the circumstances. In this perspective, the gifts were of movable property situate outside India. The donor was at all times not a citizen of India. He was non-resident. For the above reasons, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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