TaxTMI 
TaxTMI 
2017 (3) TMI 744
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....: (a) By an indenture dated 30th January, 1947, Sir Nusserwanjee Nowrosjee Wadia (Sir Ness Wadia) created an irrevocable trust for the benefit of his son Neville Ness Wadia (Neville Wadia) and his children by settling 1001 fully paid shares of Bombay Dyeing and Manufacturing Co. on trustees of Neville Ness Trust Fund No. 2 (the Trust). The indenture of lease provided that Neville Wadia (son of the settlor) would have life interest in respect of the dividends, interest and income of the settlor for his life. After the death of said Neville Ness Wadia, the property is to be divided into two equal shares and held by another Trust. (b) On 30th March, 1957, Mr. Neville Wadia relinquished his life interest in the Trust and life interest in the property belonging to the Trust. This on the ground that it did not amount towards transfer. The aforesaid issue was challenged in appeal before the authorities under the Act and finally referred to this Court by the Tribunal. This Court in the above Reference at the instance of the respondent - Revenue in Commissioner of Income Tax Vs. Neville Ness Wadia, [90 ITR 155] held that surrendering of life interest by the assessee would not amount to t....
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....r of the property received as gift was not relevant. (b) Relinquishment of life interest by the father of the applicant assessee in the property of the Trust is not a transfer of property from father to son and this has been so held by our Court in Neville N. Wadia (supra). (c) The normal meaning of "Gift" under the Transfer of Property Act contemplates a transfer to a donee. In the present facts, there is no transfer as held by our Court in Neville Wadia (supra). Thus, it is admittedly not a gift under Section 49(1)(ii) of the Act. (d) The definition of a "Gift" under the Gift Tax Act will not be applicable to proceedings under the Income Tax Act. In Gift Tax definition of word "Gift" also includes deemed gift where a consideration paid is lower than the consideration payable and the balance is considered to be a deemed gift. The concept of deemed gift is not available under the Income Tax Act, 1961. In support, reliance is placed upon the decision of the Supreme Court in Khoday Distilleries Ltd vs. Commissioner of Income Tax & Anr [307 ITR 312] . (e) Even if the definition of "Gift" as provided under the Gift Tax Act is applied, the sine qua non for the same is for transfer f....
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....t-assessee relied upon the Judgment of this Court in the case of Neville N. Wadia (supra) in support of his contention that there was no transfer upon Neville N. Wadia relinquishing his life interests. A Gift would necessarily involve transfer between two people one the donor and the other the donee. The donor would gift a property to the donee who would accept the gift and acceptance is the relevant factor to be considered in the present case. 5. In the present case he submitted that there is no transfer from one person to the other and by virtue of the operation of Trust Deed read with the deed of release, Neville N Wadia while executing the deed of release dated 30th March, 1957 had merely released and discharged the trustees of the Trust Fund. Mr. Agarwal submitted that the expression 'Gift' was not defined in the Act. He also invited our attention to the definition of Gift under the Transfer of Property Act, 1882 which defines Gift in Section 122 of the Act as follows : "Gift" is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or o....
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....rease the value of the property of her daughter Mrs Elizabeth Anne Guhl and that it may not amount to 'transfer of property' within the meaning of Section 2(xxiv)(d) of the Gift Tax Act, 1958. In that case this Court also considered the fact that the expression 'transaction entered into ' used in clause (d) of Section 2(xxiv) of the Gift Tax Act had come up for consideration before the Supreme Court in the case of Goli Eswariah's case [(1970) 76 ITR 675] wherein the Supreme Court took a view that the words "transaction entered into" contemplated in Section 2(xxiv)(d) of the Gift Tax Act cannot apply to a unilateral act. The act must be one to which two or more persons are parties. 9. The Court found that in the case of Lubimoff (supra) also the deed of release or relinquishment or surrender was executed by Mrs. Jer Mavis Lubimoff alone and nobody else was a party, much less the daughter. Such a unilateral document was not a "transfer of property" within the meaning of Section 2(xxiv) of the Gift Tax Act 1958 and not a gift within the meaning of Section 2(xii) of the said Act. 10. The Court also considered contention of the Revenue that the transaction was a Gi....
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....at the issues stand fairly covered by the decision of Neville Wadia (supra) and we find no reason to take a different view. In our view the concept of a gift clearly demands of a voluntary, conscious and positive act by one person transferring property and without any consideration therefor. 13. Considering the controversy at hand we have examined the various definitions of the expression "gift" as set out below; (a) "Gift" is defined under Section 2(xii) of the Gift Tax Act as under : "Gift" means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or moneys worth and includes the transfer or conversion of any property referred to viz. Sect. 4, deemed to be gift under that section". (b) the Transfer of Property Act, 1882 which defines Gift in Section 122 of the Act as follows :- "Gift" is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee." (c) Black's Law Dictionary defines "gift" as :- "The voluntary transfer of property to a....