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SaIn Dass Vs. Gift-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Chandigarh
Decided On
Judge
Reported in(1985)14ITD337(Chd.)
AppellantSaIn Dass
RespondentGift-tax Officer
Excerpt:
.....own name besides other 54 acres held by his joint family, is said to have given rs. 10,000 as a gift to shri jatinder kumar. strangely enough, in the affidavit shri sain dass submitted that shri jatinder kumar is his relative but when he was examined on oath by the gto, he submitted that gurcharan das, father of shri jatinder kumar was not related to him. the gto naturally looking to the facts on record considered the said gift to be ingenuine and framed the assessment as protective measure. the assessee came before the aac, who confirmed the action of the gto observing that the gift does not appear to be bona fide.3. the assessee has raised the following grounds of appeal before us against the order of the aac : 1. that the learned appellate assistant commissioner has erred in law as.....
Judgment:
1. The ground raised by the assessee in this appeal is one which is not normally raised because it cannot legally be raised. The ground of the assessee is that gift made by Shri Sain Dass in a sum of Rs. 10,000 to Shri Jatinder Kumar ought to have been considered as a genuine gift and it must have been subjected to gift-tax.

2. Facts in the background are that one Shri Sain Dass, who was an agriculturist owned 18 acres of land in his own name besides other 54 acres held by his joint family, is said to have given Rs. 10,000 as a gift to Shri Jatinder Kumar. Strangely enough, in the affidavit Shri Sain Dass submitted that Shri Jatinder Kumar is his relative but when he was examined on oath by the GTO, he submitted that Gurcharan Das, father of Shri Jatinder Kumar was not related to him. The GTO naturally looking to the facts on record considered the said gift to be ingenuine and framed the assessment as protective measure. The assessee came before the AAC, who confirmed the action of the GTO observing that the gift does not appear to be bona fide.

3. The assessee has raised the following grounds of appeal before us against the order of the AAC : 1. That the learned Appellate Assistant Commissioner has erred in law as well as on facts in upholding the gift of Rs. 10,000 made by the appellant to be not a genuine gift which is arbitrary and unjustified.

2. That merely because there does not exist any relationship between the donor and the donee, does not render the gift to be invalid or ingenuine, and as such, it is wrong to hold that the gift is not a bona fide gift.

3. That the order of the learned Appellate Assistant Commissioner is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.

The learned counsel for the assessee while addressing us submitted that if we go through the definition of gift for its bona fide, it has to be out of love and affection and without consideration and there was nothing wrong with the gift made by Shri Sain Dass in favour of Shri Jatinder Kumar. According to him, the discrepancy in the statement made in the affidavit by the assessee could not be fatal to the assessee's claim. On a query from the Bench as to under what section the order of the GTO could be appealed against before the AAC, the learned counsel for the assessee read at length Section 22 of the Gift-tax Act, 1958 ('the Act') and when he did not find any provision under which such an order could be appealed against he submitted that so far as the Tribunal was concerned, he was in appeal against the order of the AAC.When it was put to him that the matter of jurisdiction being purely legal can be raised at any stage and by any one, the order passed by the AAC becomes invalid as it is the order without any jurisdiction.

The learned departmental representative, on his part, submitted that this is a device for avoidance of tax which is a snag in this case and looking to the absence of relationship between the donor and the donee, the GTO was justified in giving a finding as he did. He relied on the Supreme Court's judgment in the case of Juggilal Kamlapat v. CIT [1969] 73 ITR 702. He also relied on the Punjab and Haryana High Court's decision in the case of Loll Chand Kalra v. CIT [1981] 6 Taxman 171.

4. After taking into consideration the rival submissions, we are unable to interfere with the order of the AAC on the basis of the Punjab and Haryana High Court's decision in the case of Lall Chand Kalra (supra).

In that case, the gift was identical by donor who was agriculturist but was not related to the donee and in that case the contention of the assessee was that donor being a stranger to the donee, there was no reason why he should have made a gift to the assessee. Besides, the dispute was also regarding the means of the donor. In that context, their Lordships held that, 'even if- the two donors were found to be men of means, this finding of the Tribunal that gifts were not genuine could not be said to be vitiated because the findings of the Tribunal regarding the nature of the gifts could be sustained on other reasons given by it for disbelieving the genuineness of the alleged gifts'.

There is no dispute about the fact that revenue can pierce the veil in tax matters as was held by the Supreme Court in the case of Juggilal Kamlapat (supra) though that was a matter pertaining to corporation.

Even on basis of jurisdiction, when we go through Section 22, we find that there did not arise any grievance out of the order of the GTO, which could entitle the assessee donor to come forward in appeal. The order of the AAC due to lack of jurisdiction has got to be annulled but at the same time, the order of the ITO would stand, so far as merit of the matter is concerned, as it is covered by the Punjab and Haryana High Court's decision. The AAC in his order confirmed the order of the GTO and by our decision, the order of the GTO would hold the field, but due to the correct application of law, the remedy resorted to by the assessee in the form of first appeal before the AAC was not proper.

Anyway, as stated above, Lall Chand Kalra's case (supra) on merits is against the assessee and, therefore, the order of the GTO survives.

5. In the result, the assessee's appeal is dismissed subject to the above observations.


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