Commissioner of Gift Tax vs K. Krishnakumari

N.V. Balasubramanian, J.—At the instance of the Revenue, the following question has been referred for the opinion of this Court under s.

26(1) of the GT Act:

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the gift of Rs. 1,85,024 made by the assessee to

Miss PSG Naidu Charities during the financial year relevant to the asst. yr. 1979-80 is not a taxable gift and should not be taken into account for

aggregation with the value of the taxable gift returned for the asst. yr. 1980-81?

The assessment year involved is 1980-81. The assessee made taxable gift for the previous year 1979-80 and she submitted return for the said

assessment year. The GTO noticed that in the earlier asst. yr. 1979-80, he has held that the value of the gift made to PSG Naidu & Sons Charities

was a taxable gift, and taking into account of the value of taxable gift made to the said trust made in the earlier assessment year applied the

provisions of aggregation found in s. 6A of the GT Act and aggregated the same with the value taxable during the year 1980-81 and levied gift-tax

for the asst. yr. 1980-81. The assessee filed an appeal challenging the aggregation made of the earlier year''s gift on the ground that the taxable gift

to the said charities was the subject-matter of the appeal before the Tribunal and the Tribunal had found that the gift made to the said charities was

not taxable gift. The CIT(A) followed the order of the Tribunal for the asst. yr. 1979-80 and held that the gift made to the said charities could not

be treated as taxable gift and the value of the gift made by the assessee during the previous year cannot be aggregated. The Revenue preferred an

appeal before the Tribunal on the ground that the earlier order of the Tribunal had not become final. The Tribunal followed its earlier order for the

assessment year and held that the gift to the said Trust was not a taxable gift and hence the said gift cannot come in for the purpose of aggregation

under the provisions of s. 6A of the GT Act.

The earlier year order of the Tribunal was the subject-matter of tax case reference in Tax Case No. 1943 of 1984 and we have held in the said

tax case, which came before us this day that the order of the Tribunal holding that the gift made by the assessee to PSG Naidu & Sons Charities

during the preceding asst. yr. 1979-80 was not a taxable gift is correct and there was no taxable gift made by the Assessee during the said

assessment year. In view of our judgment in the said tax case, the order of the Tribunal in the instant case holding that the value of the said gift

could not be taken into account for the purpose of aggregation is in order. Hence, we answer the question referred to us in the affirmative and

against the Department. There will be no order as to costs.

OPEN