Exemption claim abandonment in gift-tax valuation dispute raised a referable question of law.

Acceptance of a higher valuation of gifted property did not, on the recorded facts, amount to an express abandonment of the exemption claim under section 5(1)(xii) of the Gift-tax Act, 1958. The assessment order noted agreement on valuation only, and the relied-upon letter contained no clear statement that the exemption claim was being given up. On that basis, a question of law arose as to whether the Tribunal was correct in treating the claim as abandoned. The Tribunal was therefore not justified in refusing reference, and the proposed question was directed to be referred to the High Court.

---

---

Issues: Whether the Tribunal was justified in holding that the assessee had given up his claim for exemption under section 5(1)(xii) of the Gift-tax Act, 1958, before the Gift-tax Officer, and whether the question sought to be referred raised a question of law.

Analysis: The assessment order did not expressly record any withdrawal of the exemption claim; it only recorded the assessee's agreement to the valuation of the gifted property. The letter relied upon by the Tribunal also did not contain any express statement that acceptance of the higher valuation would entail abandonment of the exemption claim. On those facts, a question of law arose as to whether the Tribunal was right in treating the claim as given up.

Conclusion: The Tribunal was not justified in refusing reference, and the question proposed was directed to be referred to the High Court.

---