TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>High Court rules against excluding Rs. 2 lakhs as gift to minor son from wealth calculation, citing lack of essential elements.</h1> The High Court ruled against excluding a sum of Rs. 2 lakhs from the computation of the assessee's wealth, finding that the purported gift to a minor son ... Computation of the wealth – karta of HUF made gift to son by book entries but control over gifted amount was retained by family – whether it was a valid gift – whether it could be excluded from wealth of HUF Issues:Whether a sum of Rs. 2 lakhs was rightly excluded from the computation of the assessee's wealth based on a claimed gift to a minor son.Analysis:The case involved a Hindu undivided family where a sum of Rs. 2 lakhs was purportedly transferred to the minor son, Tej Prakash, and claimed as a gift to be excluded from the family's wealth. The Wealth-tax Officer initially rejected this claim, stating that the transfer did not legally constitute a gift to the minor. However, the Appellate Tribunal later deemed the transfer as a valid gift, leading to the current reference to the High Court for opinion.The Tribunal found that on the date of the alleged gift, the available cash balance with the assessee was significantly lower than the claimed gift amount, with no evidence that negotiable assets of equivalent value were gifted. Additionally, the funds were utilized by the family for business purposes, and no interest was paid to the minor donee until years later. The High Court emphasized that the mere book entry transferring the amount did not constitute a valid gift, especially considering the lack of intention to transfer the funds out of the family assets.Furthermore, the court highlighted the absence of evidence regarding the acceptance of the gift by the minor's guardian, essential for a valid gift transaction. It was noted that the donor and the donee were not separate entities, raising doubts about the legitimacy of the alleged gift. Without proper acceptance and clear intent to transfer ownership, the court concluded that no valid gift had been made by the family to the minor son, Tej Prakash.Ultimately, based on the facts and circumstances presented, the High Court opined that the sum of Rs. 2 lakhs could not be excluded from the computation of the assessee's wealth. The court ruled against the exclusion of the amount, emphasizing the lack of evidence supporting a genuine gift transaction. The reference was allowed with costs, and the counsel's fee was assessed accordingly.In conclusion, the High Court's judgment focused on the essential elements of a valid gift, including intention, acceptance, and genuine transfer of ownership, ultimately determining that the claimed transfer did not meet the legal criteria for exclusion from the family's wealth computation.
TaxTMI 
TaxTMI 
