9911796707
TMI Blog1984 (3) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... dent of Hoshiarpur. He filed a return of gift on February 29, 1973, declaring the taxable gift at Rs. 15,000. A revised return was filed on October 18, 1973, declaring the taxable gift as nil. The assessee earlier had sold land situate in Jammu and Kashmir and credited the sale proceeds thereof in his account maintained with Laxmi Commercial Bank, Jammu. Out of those deposits, the assessee gifted on amount of Rs. 20,000 to his daughter, namely, Miss Kum Kum Kuthiala, by means of a cheque which was credited in her account in the same bank. The gift concededly had been made in the State of Jammu and Kashmir. In these circumstances, the assessee claimed that the gift was exempt. In support thereof, he relied upon the certificate issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained that s. 3 was the charging section, and unless the gift squarely fell within that section, the other provisions of the Act could not be activated. Basis for the argument was twin-fold. Firstly, it was contended that the G.T. Act, 1958, was a legislative measure enacted by Parliament under Entry 97 of List I of Schedule VII to the Constitution, that is, under its residuary powers and as such the said Act could not apply to the State of Jammu and Kashmir under article 370 of the Constitution. Secondly, it was contended that the Act otherwise had not been extended to the State of Jammu and Kashmir under s. 1(2) of the Act. On the applicability of either principle, it was asserted that the subject of legislation under the Constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is futile to go into the question whether the Act as such could or could not be enacted for the State of Jammu and Kashmir. The fact remains that it has not been extended to the State of Jammu and Kashmir and as such is an Act which is not applicable to that State. The point to be seen is on what axis does the tax revolves and does it revolve on an incident happening in a territory which falls out of the purview of the Act. Section 3, the charging section, reads as follows: " 3. Charge of gift-tax.-Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the first day of April, 1958, a tax (hereinafter referred to as gift-tax) in respect of the gifts, if any, made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is patently very wide. It is held by the Supreme Court in Nazareth's case [1970] 76 ITR 713, that gift-tax is not a tax on lands and buildings as such but is a levy upon a particular use, which is transmission of title by gift. So it is not difficult to discern from the scheme of the Act, and as thus spelled out by the Supreme Court, that the taxable event is the particular use of property by transmission of title by gift. So, to say that the taxable event was the property gifted and that by itself was the taxable incident is not correct. Sequelly placement of the gifted property per se whether " within or without India " is also alien to the concept of s. 3 if read in plain terms and also whether it is movable or immovable. But, as said b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said territories. When this Act does not extend to the State of Jammu and Kashmir, the relevant provisions can easily be substitutedly paraphrased to convey the legal statement that gift-tax shall not be charged under the Act, in respect of the gifts made by any person of movable property placed in the State of Jammu Kashmir if that person being an individual, is a citizen of India and is ordinarily resident in the State of Jammu Kashmir. Thus, if person who is an individual, is a citizen of India and is ordinarily a resident in the State of Jammu Kashmir, gift-tax is not to be charged from him in respect of the gifts made by him of movable property in the State of Jammu and Kashmir. But, if that person being an individual and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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