K.S. Puttaswamy, J.
1. In this reference made under section 26(1) of the Gift-tax Act, 1958 (Central Act 18 of 1958) (the Act), the Income-tax Appellate Tribunal, Bangalore Bench, Bangalore (Tribunal), at the instance of the Revenue, has referred the following question of law for the opinion of this court :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the gift-tax payable, which was agreed to be paid by the donee, has to be deducted, as a consideration within the meaning of section 4(1)(a) of the Gift-tax Act, 1958 ?' In order to appreciate the question referred to us, it is necessary to notice the facts that are not in dispute.
2. Under a deed of settlement dated March 31, 1973 (annexure-A), the assessee settled her half share in a valuable immovable property, a hotel complex known as 'Tourist Hotel' bearing Door Nos. 21, 21/1, 21/2 and 21/3, situated on Race Course Road, Bangalore-9, in favour of one Venkatesha Madi of Bangalore, her foster son, with a condition that he shall pay a sum of Rs. 25,000 to one Smt. R. Ahalya and the gift-tax payable by her under the Act and the same was accepted by him with those conditions.
3. In her return filed under the Act before the Gift-tax Officer, Assessment-5, Circle-I, Bangalore, for the assessment year 1973-74, relevant to the previous year ending on March 31, 1973, the assessee claimed that the value of the property gifted by her was Rs. 2,00,000 and the gift-tax payable by the donee should be allowed as a permissible deduction under the Act. On March 5, 1974, the Gift-tax Officer completed the assessment, determined the value of the property at Rs. 2,75,000 and rejected the claim of the assessee to allow the gift-tax payable by the donee as a permissible deduction under the Act with which claim only we are concerned in this reference. Aggrieved by the order made by the Gift-tax Officer, the assessee filed an appeal in Appeal No. GRA. 2174-75 before the Appellate Assistant Commissioner of Gift-tax, Bangalore, who by his order dated August 12, 1976, dismissed the same (annexure-C). Aggrieved by the said orders of the Appellate Assistant Commissioner and the Gift-tax Officer, the assessee filed a second appeal before the Tribunal in Appeal No. G.T.A. 26/Bang. /1976-77 which on December 14, 1977, has allowed the same in so far as it related to deduction of gift-tax payable by the donee. Hence, this reference.
4. Sri K. Srinivasan, learned senior standing counsel for the Income-tax Department, assisted by Sri H. Raghavendra Rao, junior standing counsel for the Income-tax Department, appeared for the Revenue. Sri S. P. Bhat, learned advocate, appeared for the assessee. Sri Srinivasan has urged for answering the question in favour of the Revenue on the ground that gift-tax payable by the donee on the plain language of section 4(1)(a) of the Act was neither consideration nor a permissible deduction at all.
5. Sri Bhat, in supporting the view propounded by the Tribunal as sound and correct, has urged for answering the question in favour of the assessee.
6. Earlier, we have noticed that while the assessee valued the property gifted by her at Rs. 2,00,000, the Gift-tax Officer valued the same at Rs. 2,75,000 with which the Appellate Assistant Commissioner concurred. As we apprehend, the Tribunal does not appear to disturb the same. We, however, do no not consider it necessary to examine the same.
7. On the claim made by the assessee to deduct the gift-tax payable by the donee as a deduction, the Gift-tax Officer expressed thus :
'2. Deduction of gift-tax liability. -The claim for deduction of gift-tax payable from the total value of the gift is not admissible because there is no provision in the Gift-tax Act for the deduction of such a liability. It makes no difference as to whether any mention is made in the gift deed creating a charge on the settled property in respect of the gift-tax payable. Even without any such specific provision in the deed, gift-tax payable can be recovered from the donee if it is not recoverable from the donor. Therefore, the deduction of gift-tax payable is not admissible. By my letter dated January 8, 1974, these aspects were pointed out to the assessee. In reply dated January 19, 1974, the assessee has merely stated that the charge has been created in the settlement deed itself. There is no substance in this contention. This liability will not be allowed.'
8. On this aspect, the Appellate Assistant Commissioner had not expressed any view. But the Tribunal accepted the same in these words :
'On the plain language of section 4(1)(a), therefore, the gift-tax payable or agreed to be paid on behalf of the donee by his legal guardian has to be deducted as a consideration within the meaning of section 4(1)(a) and it is only the excess of the market value over the consideration that has to be assessed under the provisions of that section. In other words, the gift-tax payable on the gift made to Venkatesha Madi (but not the gift-tax payable on the gift to Smt. Ahalya) has to be deducted in making the assessment of the gift under section 4(1)(a). The assessee's claim, therefore, has to be allowed to the extent we have indicated. The learned departmental representative has urged that there is no provision for deduction of gift-tax liability under the Gift-tax Act. In this regard, he pointed out that income-tax cannot be deducted for the purpose of income-tax assessment and deduction of gift-tax liability in this case would be contrary to the statute. He was, however, unable to show to us any specific provision in the Gift-tax Act which would go against our interpretation of section 4(1)(a) of that Act. The contention of the Department in this regard cannot, therefore, be accepted.'
9. Whether this view propounded by the Tribunal on the construction of section 4(1)(a) of the Act is correct or not is the sole question that calls for our examination. But, for that, it is necessary first to notice at least two of the well-settled principles of construction of statutes and then briefly notice the scheme and object of the Act.
10. The very first rule of construction of statutes has been succinctly expressed by Maxwell on the Interpretation of Statutes (eleventh edition) in these words (at p. 1) :
'A statute is the will of the legislature, and the fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded 'according to the intent of them that made it'. If the words of the statute are in themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature.'
11. Another equally well-settled principle in the construction of taxing provisions has been admirably stated by Rowlatt J., in the oft-quoted passage in Cape Brandy Syndicate v. IRC  1 KB 64, 12 TC 358 in these words :
'In a taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.'
12. Bearing these principles and other well settled principles of construction of statutes, it is necessary to ascertain the scope and ambit of section 4(1)(a) of the Act.
13. The Act has been enacted to provide for levy of gift-tax. Section 2 defines certain terms. Section 2(xii) of the Act defines the term 'gift' as a 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 or conversion of any property referred to in section 4 which is deemed to be a gift under that section. Section 3 of the Act is the charging section and provides for levy of gift-tax on gifts falling within the meaning of section 2(xii) of the Act at the rate/rates specified in the Schedule to the Act.
14. Section 4 of the Act declares certain transfers in the circumstances specified therein as gifts for purposes of the Act. Section 4 of the Act creates a legal fiction and deems certain transfers other than gifts as gifts for purposes of the Act. This section enlarges the gamut of taxation by netting in transactions and transfers which partake of the nature and have the effect of effecting a gift. An element of bounty or benefit is essential to a gift. This element of bounty or benefit may manifest itself in a variety of ways [vide page 374 of law and Practice of Gift-tax and Wealth-tax by C. A. Gulanikar (1984 Edn.)]. With this broad analysis of section 4, we will now read section 4(1) of the Act and the same reads thus :
'4. (1) For the purposes of this Act, -
(a) where property is transferred otherwise than for adequate consideration, the amount by which the market value of the property at the date of the transfer exceeds the value of the consideration shall be deemed to be a gift made by a transferor :
Provided that nothing contained in this clause shall apply in any case where the property is transferred to the Government or where the value of the consideration for the transfer is determined or approved by the Central Government or the Reserve Bank of India.'
15. This section declares that where the property is transferred otherwise than for adequate consideration, the amount by which the market value of the property on the date of the transfer exceeds the value of the consideration shall be deemed to be a gift made by the transferor. Every transfer other than by way of a gift, notwithstanding the nature of transfer, is deemed to be a gift, if the circumstances mentioned in the section exist. This provision provides for ignoring the stated money consideration in the deed of transfer and then ascertain the market value of property transferred as on the date of transfer and treat the difference between the real market value of the property and the stated consideration as a gift for the purpose of the Act and subject that difference to gift-tax under the Act. This section applies to all transfers except transfers to the Government or where the value of consideration is determined or approved by the Central Government or the Reserve Bank of India. Except for this, this provision does not provide for treating the gift-tax payable by either of the parties as consideration or part of the consideration or gift at all. We are constrained to say that the very strained and too artificial a construction placed by the Tribunal does not flow from the language of the section that is simple and obvious. On the language of the provision as also on any legal principle, it is impossible to hold that gift-tax undertaken to be paid by the donee can be treated as consideration and can be allowed as a permissible deduction. We have no hesitation in holding that the construction placed by the Tribunal is unwarranted and plainly erroneous.
16. In its order, the Tribunal appears to hold that the principles of proof and burden of proof are also applicable for interpreting section 4(1) of the Act. We are of the view that the principle of proof and burden of proof have no relevance in interpreting a provision of a statute, that too, a taxing statute. We are clearly of the view that the view taken by the Tribunal that the failure, if any, by the Revenue to show that there are no other provisions that militated against its construction, was plainly erroneous.
17. On the foregoing discussion, it follows that the answer to the question referred to us must be in the negative, in favour of the Revenue and against the assessee.
18. Before parting with this case, it is necessary to notice that relying on the observation made by a Division Bench of this court in CIT v. M. Ramaiah Reddy : 158ITR611(KAR) , Sri Bhat has urged that the Tribunal had failed to consider the contention urged by the assessee touching on the valuation of the property made by the Gift-tax Officer and affirmed by the Appellate Assistant Commissioner and the Tribunal should be directed to deal with the same.
19. On the finding recorded by the Tribunal and on the question referred to us, this contention cannot be examined by us. Whether any contention urged by the assessee had not been examined and decided by the Tribunal and, if so, what steps should be taken by the assessee to have the same decided, is a matter for the assessee to examine and take such steps as are open to her in law. We, therefore, decline to examine this contention and leave the assessee to work out her remedies, if any, before the Tribunal.
20. In the light of our above discussion, we answer the question referred to us in the negative, in favour of the Revenue and against the assessee. But, in the circumstances of the case, we direct the parties to bear their own costs.