TaxTMI 
TaxTMI 
1977 (11) TMI 76
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....Nos. 739 and 740 are in the name of his minor son Sunderlal aged 4-1/2 years. In document No. 739 the mother's brother aged 70 of the assessee is also included. Right from the day of purchase that gentleman is to be in possession and enjoyment of the property for a period of 14 years or death whichever is earlier i.e. a life estate is created for him. In document No. 740 which is also of the same pattern it is the mother aged 66 of the assessee that is included. Document Nos. 639 and 637 are in the name of another minor son aged 6 of the assessee. Those are also of the same pattern as the other former two. In document No. 639 it is the mother's brother aged 68 of the assessee that is included and in document No. 637 it is the mother-in-law ....
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.... Now the main argument of the assessee is that long before the controversy as to whether there is a gift or not started he had treated and held out this property as his own. These purchases are in February, 1974. If these are assessee's own purchases it has necessarily to be included in the net wealth of the assessee, for the valuation dt. 31st March, 1974. The assessee is a regular income-tax and wealth-tax assessee even before. The assessee furnished the WT return for the valuation date 31st March, 1974 on 17th March, 1975. In the WT return the assess had shown this property as his own property. Of course, even if it is a gift even then it has to be included in the return a his net wealth because of the deeming provisions in the WT Act. B....
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....initiate only after the WT return was furnished and that at the time when the WT return was furnished there is no probability of gift-tax proceedings being initiated. So that the assessee would have invented defences to a gift-tax proceedings. On these facts naturally the question arises as to why should be assessee, at a point of time when he was untrammelled by any fear of gift-tax proceedings particularly when the documents are written up as sale deeds in the names of minors and majors and there is no recitals in the documents that the purchase price was paid by the assessee, treat it as his own property. We cannot conceive of any other answer except the answer that the assessee did so because he believed that it is his own property and ....
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....ts to frustrate his own object. Normally prudent men do not do so. This is not a case where the assessee made a gift and later wanted to go back on it. Because there is no material to suggest that the donee had wanted to cancel the gift and make it ineffective. 5. Another argument of the Departmental Representative is that the assessee might have after the purchase realised that even if gift-tax is paid he will still have to pay, in view of the amended law from 1st April, 1972, wealth-tax also by virtue of the deeming provisions and that, therefore, to avoid one of the two taxes, namely, payment of gift-tax, wealth-tax being unavoidable, he began to treat it as his own property. If the change in law had occurred after the purchase this a....
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....play that role. There was also no immediate necessity to make any gifts to the minors. 7. The Departmental Representative argued that if one looks into the conduct of the assessee in making the purchases it would become clear that his intention was to make provision for himself, his wife, children and relatives. We are quite satisfied that there is an intention on his part to make a provision. But we are inclined to think that it is only to make a provision for relatives. So the reference to the minors has to be excluded from him submission. 8. Then the Departmental Representative drew our attention to the covering letter to the GT return and the letter filed before the AAC, both written by the authorised representative of the assesse....