Rakesh Dumra vs Assistant Commissioner of Income Tax-cum-Gift Tax

Heard learned counsel for the petitioner and perused the impugned order dated March 13, 1995, annexure-P-8, passed by the Assistant Commissioner of Gift-tax, Central Circle III, Ludhiana. We have also perused the return filed on behalf of the respondents.

The Assistant Commissioner of Income Tax, Central Circle II, Ludhiana, after applying his mind, vide his order, annexure-A, has come to the conclusion that the existing shareholders, by transferring the shares in question, legitimately belonging to them to investment companies, have saved a substantial amount of wealth-tax. The Assistant Commissioner further opined that the assessee has not explained anything to prove that his conduct is bona fide and, therefore, it is held that the abandonment of the offer of rights shares is not bona fide and, hence, liable to tax u/s 4(1)(c) of the Gift-tax Act, 1958 (see page 47 of the compilation). In the next paragraph, the Assistant Commissioner has referred to the manner in which the rights shareholders'' offers were not accepted and they were offered to investment companies. There are various other issues which are required to be gone into in depth by the appellate authority with reference to the documents on record and other evidence.

Mr. Gupta, learned senior counsel, however, urged that in the present writ petition no disputed questions of fact arise and the issues, which he has raised in the writ petition, can be disposed of with reference to the provisions of the Gift-tax Act, company law and the various decisions of the Supreme Court and other High Courts. He tried to show some of the judicial decisions, but, in our opinion, it would not be appropriate to conclude the issues one way or the other in the absence of findings of fact having been recorded by the appropriate authorities. It may also be stated that under the Gift-tax Act, an appeal lies to the Commissioner of Gift-tax and the petitioner, if so advised, may file an appeal against the impugned order. Mr. Gupta, however, urged that the petitioner is prepared to file an appeal before the appellate authority, but the same would be now barred by limitation. If the petitioner files an appeal before the appellate authority on or before September 8, 1995, the same may be entertained without any objection as regards limitation.

The writ petition to stand summarily rejected. A certified copy of this order be furnished to the petitioner on payment of urgent costs within four days.