Deemed gifts by a public charitable trust fall within the Gift-tax exemption, making the assessment unsustainable.

The definition of "gift" under section 2(xii) of the Gift-tax Act is broad enough to cover deemed gifts, and the exemption for a public charitable trust under section 45(e) applies equally to such deemed gifts. The analysis states that the provision does not distinguish between an outright gift and a deemed gift, and that the issue had already been settled in favour of the assessee. On that basis, the gift-tax assessment against the public charitable trust could not be sustained.

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Issues: Whether the exemption in section 45(e) of the Gift-tax Act, 1958 applies to deemed gifts made by a public charitable trust, and whether the definition of "gift" in section 2(xii) includes such deemed gifts.

Analysis: The definition of "gift" in section 2(xii) of the Gift-tax Act, 1958 is wide enough to include transfers treated as deemed gifts under the Act. The provision granting exemption to a public charitable trust does not draw any distinction between an outright gift and a deemed gift. The issue had also been settled earlier in favour of the assessee, and there was no reason to take a different view.

Conclusion: Section 45(e) applies to deemed gifts made by a public charitable trust, and the gift-tax assessment could not be sustained against the assessee.

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