Advance gift-tax rebate survives revised valuation when tax was paid in advance under the statutory scheme.

Section 18 of the Gift-tax Act, 1958 entitled an assessee to rebate on advance gift-tax paid, and that credit could not be denied merely because the Gift-tax Officer later revised the valuation or recalculated the assessable amount. The provision operated on payment of tax in advance at the prescribed rate, not on the correctness of the assessee's initial valuation at the payment stage. Following the earlier ruling on the same point, the Madras HC held that a shortfall created by variation in valuation did not defeat the rebate. The assessee was therefore entitled to rebate on the entire advance gift-tax paid.

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Issues: Whether the assessee was entitled to rebate under section 18 of the Gift-tax Act, 1958, on the advance gift-tax paid, notwithstanding the gift-tax officer's revised valuation and recalculation of the assessable amount.

Analysis: The statutory scheme of section 18 allows credit where a taxable gift is met by advance payment of tax calculated at the scheduled rates. The provision does not make the rebate dependent on the gift-tax officer's own valuation or on the correctness of the assessee's computation at the stage of advance payment. The incentive is granted for payment of tax in advance, and the benefit cannot be denied merely because the assessment ultimately proceeds on a higher valuation or because the officer treats an item differently for assessment purposes. The court followed the earlier decision on the same point and held that a shortfall arising from variation in valuation did not defeat the rebate.

Conclusion: The assessee was entitled to the rebate under section 18 on the entire advance gift-tax paid, and the answer to the reference was in favour of the assessee.

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