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TMI Blog1976 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... gifts made by Shri Kumudeswar Goswami were assessable to gift-tax in the assessment year 1960-61 ?" The facts of the case may briefly be stated as follows : The relevant assessment year is 1960-61. Kumudeswar Goswami gifted 5 bighas 2 kathas of land under six registered deeds of gift dated June 11, 1959, showing a total value of land at Rs. 1,50,000 in favour of his six sons, namely, K.Goswami, H. Goswami, B. Goswami, D. Goswami, L. Goswami and J. Goswami. Each of the six sons got 4 1/2 kathas of land individually, the value of which was shown at Rs. 25,000. Kumudeswar Goswami also gifted 24 shares of Rs. 1, 000 each (face value) of M/s. Bahadur Tea Co. Private Ltd. to his six sons, whose names were recorded in the books of the company on March 4, 1960, and each son thus had got 4 shares. Kumudeswar Goswami also gifted Rs. 90,000 in cash to his six sons and gave Rs. 15,000 in cash to each of them. According to the Gift-tax Officer, these gifts were made by Kumudeswar Goswami to his six sons in the previous year relevant to the assessment year 1960-61 before his death. Kumudeswar Goswami died on February 17, 1961. After the death of Kumudeswar Goswami on February 17, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the assessment year 1960-61, and (iii) that the valuation of the land as found by the Gift-tax Officer was reasonable. Having so held, the Appellate Assistant Commissioner dismissed the appeal and confirmed the assessment made by the Gift-tax Officer. Thereafter, H. Goswami, one of the assessees, filed an appeal before the Tribunal against the order of the Appellate Assistant Commissioner and the following grounds were taken before the Tribunal: (i) that Kumudeswar Goswami was governed by the Mitakshara school of Hindu law; (ii) that the properties settled by him on his sons were by way of family settlement of ancestral properties and, therefore, the Gift-tax Act, 1958, was not attracted; (iii) that 27 kathas of land were gifted in 1952 and there was no material on record to rebut the same ; (iv) that the valuation of the land at the flat rate of Rs. 7,500 per katha was not justified; and (v) that the valuation of shares at Rs. 4,500 per share was also exorbitant and arbitrary. During the pendency of the appeal, H. Goswami died on May 9, 1968, and on their application the legal representatives of H. Goswami were substituted in his place. Thereafter, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners, that late Kumudeswar Goswami was governed by the Mitakshara school of Hindu law and, therefore, the learned Tribunal was not correct in holding that the gifted properties belonged exclusively to Kumudeswar Goswami being his separate property. The learned counsel has submitted that whether the family of Kumudeswar Goswami is governed by the Mitakshara law or not, has not been decided by the learned Tribunal. We have considered the order of the learned Tribunal on this point. It is found that the learned Tribunal observed that it was not necessary for it to give any finding on the point whether the family was governed by the Dayabhaga school of Hindu law or by the Mitakshara school. The learned Tribunal has observed that if the family was governed by Dayabhaga law, then the property in question will necessarily be separate property of Kumudeswar Goswami. The learned Tribunal has further observed that even if a Hindu is governed by the Mitakshara law, still he may possess separate property and such property may belong exclusively to him and no other member of the coparcenary, not even his male issue, acquires any interest in it by birth and that he may sell it or make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swar Goswami would not have agreed to take deeds of gift and they would have insisted on execution of a deed showing family arrangement. The learned counsel for the appellant has asserted that the deeds of gift were executed as the intention was to partition the lands and properties. It is not possible to accept this contention of the learned counsel for the appellant in view of the recitals in the deeds of gift." Thus we find that the recitals in the deeds of gift clearly show that the property in question was treated by Kumudeswar Goswami as his own property and he gifted the same to his sons as his own property and his sons also accepted that position, inasmuch as they accepted the gifts. That being so, we hold that the learned Tribunal on the materials on record and for good reasons was justified in holding that the gifted properties belonged exclusively to Kumudeswar Goswami being his separate property. We, therefore, answer the second question in the affirmative and against the assessee. Let us now consider the first question of law. Kumudeswar Goswami during his lifetime made the gifts of the land in question by registered deeds of gift dated June 11, 1959. During h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." Section 19 of the Act reads as follows: "19. (1) Where a person dies, his executor, administrator, or other legal representative shall be liable to pay out of the estate of the deceased person, to the extent to which the estate is capable of meeting the charge, the gift-tax determined as payable by such person, or any sum which would have been payable by him under this Act if he had not died. (2) Where a person dies without having furnished a return under section 13, or after having furnished a return which the Gift-tax Officer has reason to believe to be incorrect or incomplete, the Gift-tax Officer may make an assessment of the value of the taxable gifts made by such person and determine the gift-tax payable by him, and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person if he had survived, require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which might, under the provisions of section 15, have been required from the deceased person. (3) The provisions of sections 13, 14 and 16 shall apply to an executor, administra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and having determined the share of each, prepared a map showing the plots and delivered possession accordingly. It has also been recited in the deed of gift that delivery of possession was given in 1952 and since then the donees had been in possession and as no registered deed of gift was executed then, this deed of gift was being executed. The learned counsel has submitted that since the gift was made in 1952 it is not subject to gift-tax under the provisions of the Act of 1958. In support of his submission the learned counsel has drawn our attention to the following provisions of the Act: "3. Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the 1st day of April, 1958, a tax (hereinafter referred to as gift-tax) in respect of the gifts, if any, made by a person, during the previous year (other than gifts made before the 1st day of April, 1957) at the rate or rates specified in the Schedule." "2. (xii) 'gift ' means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth, and includes the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effective in law only on June 11, 1959. No transfer by gift can be said to have taken place in respect of the lands in question prior to 1st day of April, 1957, in the absence of the registered deed of gift. These registered deeds of gift were admittedly executed and registered in 1959. That being so, the gifts under the registered deeds of gift are chargeable to gift-tax under section 3 of the Act. It has also been found that the transfer of 24 shares were recorded in the books of M/s. Bahadur Tea Co. Private Ltd. on March 4, 1960. The learned Tribunal also on consideration of the materials on record has found that the cash gifts of Rs.90,000 were made during the previous year to the assessment year 1960-61. Thus, we hold that, on the facts and in the circumstances of the case, the learned Tribunal was justified in holding that the gifts made by Kumudeswar Goswami were assessable to gift-tax in the assessment year 1960-61. Accordingly, we answer the third question of law in the affirmative and against the assessee. In the result, all the three questions of law are answered in the affirmative and against the assessee. The reference is answered accordingly. We, however, make n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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