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TMI Blog1991 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had filed copies of various pay-in-slips and counterfoils of cheques in support of the statement that the gifts were made by drawing cheques on Bank of India, Srinagar Branch and was deposited by the donees in Srinagar in Bank of India and that these documents supported the contention that the gifts were made in Jammu Kashmir to which gift-tax was not applicable. He recorded a finding that the assessee was not chargeable to gift-tax in respect of gifts made by him on 24-5-1983 to various trusts aggregating to Rs. 32 lakhs as shown in Annexure-C forming part of the return. 3. The Commissioner of Gift-tax, Gujarat-I, Ahmedabad issued notice dated 14-7-1987 under section 24(2) of the Gift-tax Act, 1958 in which it was mentioned that the exemption granted under section 5(1)(ii)(a) by the GTO was irregular and had resulted in loss of revenue and that the said order was prejudicial to the interests of revenue. He called upon the assessee to show cause by 5-8-1987 as to why that order should not be revised. He directed the assessee to furnish following information by the abovementioned date viz. : (i) Total assets owned by the assessee on the date of alleged gift. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinubhai Chimanbhai and two others, amounts of Rs. 27,61,000 and Rs. 27,90,000 were respectively transferred to this bank account from the account of Kasturbhai Lalbhai and thirty others on 19-5-1983 and 20-5-1983 respectively. The above drafts were deposited in the Srinagar Branch of Bank of India on 23-5-1983 in the account of the assessee which was opened on or about the same day. The introduction to the Manager of the Srinagar Branch was given by the Manager of Ahmedabad Branch. On the basis of cheque books issued by Srinagar Branch the assessee issued 22 cheques favouring ABC Trust No. 201 to ABC Trust No. 222 and those cheques were all deposited by transfer from the assessee's accounts to the accounts opened in the names of those trusts on 24-5-1983 itself and demand drafts were drawn by the Srinagar Branch of the Bank of equivalent amounts payable at Ahmedabad Branch. The learned Commissioner found that the bank accounts of those trusts were opened on 23-5-1983 by deposit of cash of only Rs. 500 each and except the deposit of cheque in question and issue of bank drafts against the same and bank charges there were no other transactions in the accounts of those 22 trusts in Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, present appeal has been filed by the assessee. 9. It was submitted on behalf of the assessee that notice to show cause for taking action under section 24(2) of the Act issued on 11-3-1988 was invalid because in that notice facts which were gathered by the learned Commissioner by issue of earlier notice dated 14-7-1987 to the assessee and notices dated 20-8-1987 to Vimla Siddharthbhai and Tarla Siddharthbhai were taken into account. It was submitted that the Commissioner can look into the record of the Gift-tax Officer only and what was not on the record of GTO cannot be looked into by the Commissioner for initiation of action under section 24(2) of the Act. Reliance was placed on the decision of the Single Member of the Tribunal in Hari Om Aggarwal v. ITO [1990] 34 ITD 420 (Delhi). His further submission was that the learned Commissioner was wrong in observing that the situs of the amount was at Ahmedabad and that facts indicated a device to evade tax. It was submitted that the assessee was resident but not ordinarily resident for the purpose of Income-tax Act during the relevant accounting year and as such he was entitled to claim exemption under section 5(1)(ii)(a) of the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as a person who is not ordinarily resident in said territories within the meaning of section 5(1)(ii)(a) of the Gift-tax Act, 1958. 11. In reply, the learned counsel for the assessee reiterated that powers under section 24(2) of the Act could not have been exercised on the facts of the present case. He submitted that the plea of the Department that the provisions of section 5(1)(ii)(a) were not at all attracted cannot be entertained because that was not the ground on which the learned Commissioner has revised the assessment order. Reliance was placed on the decision of Punjab and Haryana High Court in CIT v. Jagadhri Electric Supply Industrial Co. [1983] 140 ITR 490 in which it was held that the Tribunal cannot substitute grounds which did not form part of the order of the Commissioner. 12. We have considered the rival submissions and facts on record. The undisputed facts are that the amount of Rs. 32 lakhs which is subject matter of gift was lying at Ahmedabad on 19-5-1983. Drafts in respect of this amount were purchased on 19-5-1983 and 20-5-1983 on Bank of India, Srinagar Branch and those drafts were deposited by the assessee in the Bank of India, Srinagar Bra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is that the material gathered in such enquiry could not be taken into account by the learned Commissioner. We are unable to accept this submission. It is true that the record which the learned Commissioner has to see is the record of the GTO. However, in order to satisfy himself whether the order of the GTO was erroneous or prejudicial to the interest of revenue he was entitled to make necessary enquiries. Section 24(2) of the G.T. Act itself makes a provision for making an enquiry. In fact it is difficult to see as to how the learned Commissioner could come to the conclusion that the order was erroneous or prejudicial to the interest of the revenue unless some enquiry is made by him. Enquiry of this nature is not prohibited by the provisions of section 24(2) of the Act. it is implicit in the very exercise of powers under said provision. The principle laid down in the decision of the Tribunal to which the learned counsel for the assessee has drawn attention would not be applicable to the facts of the present case. 14. In this connection, we may refer to the decision of the Gujarat High Court in Addl. CIT v. Mukur Corpn. [1978] 111 ITR 312. It is observed that section 263 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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