TaxTMI 
TaxTMI 
2006 (2) TMI 116
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.... 1974, made by the late C.V.CT. Thevani Achi was made in contemplation of death and hence exempt under section 5(1)(xi) of the Gift-tax Act?" The facts leading to the above question of law are as under: In this case, though there are two gifts, one a cash gift of Rs. 4,500 made on June 10, 1974, and the other gift of jewellery made on August 19, 1974, the exemption is claimed only in respect of the jewellery gift. The late C. V. CT. Thevanai Achi had two sons, one Shri C. V. CT. Venkatachalam Chettiar and another C. V. CT. R. Ranganathan Chettiar. Shri C. V. CT. Venkatachalam Chettiar has a son by name C. V. CT. Chidambaram Chettiar and Shri C. V. CT. Chidambaram Chettiar has a son who is Master C. Venkatachalam. Thus, in relation to ....
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....d thumb impression in the declaration of the return and the same was witnessed or attested by Shri K. Thiruvenkatachari, the accountant. Later, a revised return was filed by Shri V. Chidambaram by a letter dated June 27, 1975. In this letter it was stated as follows: "Late Mrs. C. V. CT. Theivanai Achi (who expired on August 28, 1974) made a gift of her jewelleries to my minor son C. Venkatachalam and has filed a gift-tax return with you on August 19, 1974. Consequent to the valuation of the said jewelleries, for wealth-tax purposes, I am filing a revised return on behalf of the donee admitting the value determined by the valuer. Approved valuer's certificate also is enclosed." By a letter dated March 25, 1976, Shri V. Chidambaram ....
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....ed the gift-tax return as the gift made by her was exempt under section 5(1)(xi). We therefore, request you to close the file as N.A." By an order passed on March 31, 1980, the Gift-tax Officer completed the assessment accepting the gift return of Rs. 2,90,469 and levied a tax of Rs. 52,010. In this order, of course, there was no discussion as to the contentions raised by the chartered accountant in his letter dated February 11, 1977. The short contention that arises for consideration is whether the gift made by C.V.CT. Thevanai Achi on August 19, 1974, was exempt under section 5(1)(xi) as made in contemplation of death of Thevanai Achi. It was the assessee's case that it was so. He relied on the fact that Thevanai Achi was 90 years old.....
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....ggrieved by the above order, the assessee preferred appeal before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal held that the gift was a gift in contemplation of death and not taxable. Learned counsel for the Revenue submitted that the gift was made only on account of natural love and affection and on account of the happiness derived by the donor, seeing her grand child. Further it was submitted that this was a gift, pure and simple, taxable in nature made on the occasion of the "Vilaiyattupotti Vevu". We heard counsel. A person of 90 years old will always be in the belief that he/she will shortly die of illness caused by old age. There may be exceptional cases where persons of 90 years will hope to live long. But ....