Trust transfer of shares by a settlor-beneficiary was a taxable gift because the transfer was without consideration and not self-to-self.

Transfer of shares by a settlor to a trust was treated as a taxable gift where the settlor was also a beneficiary, because the trustees held the property as a distinct legal entity and the settlor's beneficial interest was not absolute. The trust deed allowed the trustees to accelerate distribution and to displace the settlor in favour of other family beneficiaries, so the arrangement was not a mere self-to-self transaction. The elements of transfer, property, donor, donee and gift were satisfied, and the transfer was without consideration. The gift-tax assessment was therefore sustained against the assessee.

---

---

Issues: Whether the transfer of shares by the settlor to the trust, where the settlor was also a beneficiary under the trust, constituted a taxable gift under the Gift-tax Act.

Analysis: The trust deed showed that the trustees held the property as a distinct legal entity and that the settlor's beneficial interest was not absolute, because the trustees could accelerate distribution and the settlor could be displaced in favour of other family beneficiaries. The transfer of shares was made to the trust and not to the settlor herself, and the arrangement did not amount to a mere self-to-self transaction. The definitions of transfer, property, donor, donee and gift were satisfied, and the transfer was without consideration.

Conclusion: The transfer was a taxable gift and the gift-tax assessment was rightly sustained, against the assessee.

---