Deeming provision under gift tax law must be considered before reassessment can be sustained; matter remanded for fresh review.

A reassessment involving revocation of an earlier revocable gift and the treatment of bonus shares had to be examined under Section 4(1)(c) of the Gift Tax Act, 1958, because that deeming provision was central to whether any deemed gift arose in the relevant year. The High Court upheld the reassessment without considering that statutory framework, so the controversy could not be finally determined on the materials before it. The Supreme Court therefore set aside the impugned judgment and remanded the matter to the High Court for de novo consideration on the correct legal basis.

---

---

Issues: Whether the impugned judgment could be sustained without considering Section 4(1)(c) of the Gift Tax Act, 1958, and whether the matter required remand for fresh consideration.

Analysis: The assessment for the later year turned on whether the revocation of the earlier revocable gift and the treatment of bonus shares attracted the deeming provision in Section 4(1)(c). The High Court upheld the reassessment without examining that provision, although it was central to the controversy and had a direct bearing on whether any deemed gift of the bonus shares arose in the relevant year. In the absence of consideration of the relevant statutory framework, the merits could not be finally determined at the appellate stage.

Conclusion: The impugned judgment was set aside and the matter was remanded to the High Court for de novo consideration.

Ratio Decidendi: Where the decisive statutory provision governing the controversy has not been considered, the appellate court may set aside the judgment and remand the matter for fresh adjudication on the correct legal basis.

---