1997 (10) TMI 27

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....was right in cancelling the gift-tax assessment made in the assessee's case for the assessment year 1971-72? 2. Whether, on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that the consideration for the transfer is adequate is based on valid and relevant materials and a reasonable view to take on the facts of the case?" The assessee is assessed as an individual. The original assessment for the assessment year 1971-72 was completed by the Gift-tax Officer. Later on, on the basis of the information collected, the Gift-tax Officer was of the view that there was an escapement of gift-tax and issued a notice calling upon the assessee to file the return. The assessee filed a nil return in response to th....

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....rest of the assessee would be Rs. 8,63,077 and, therefore, he held that there was an element of gift involved in the surrender of life interest to the extent of Rs. 2,85,935. The above sum of Rs. 2,85,935 was arrived at by deducting from the value of the life interest arrived at Rs. 8,63,077 and the value of the total wealth given to the assessee which was arrived at Rs. 5,77,142. There was an appeal to the Appellate Assistant Commissioner by the assessee. The Appellate Assistant Commissioner found that there was no mala fide intention with respect to the transaction. She also, would that the valuation of the life interest adopted by the Gift-tax, Officer was not correct. She held that the valuation of the life interest at Rs. 8,63,077 m....

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.... that view of the matter, the Tribunal held that the division of the properties between the assessee and her daughters and grand children was correct. The Tribunal, therefore, held that the surrender of life interest by the assessee in the income from the property left by the assessee's husband in favour of her daughters and grand children as per the actuarial valuation which was found to beneficial to the parties was correct and came to the conclusion that the surrender was bona fide. The Tribunal also held that once the transaction is found to be bona fide. Section 4(1)(c) of the Act would not be applicable. In so far as the applicability of section 4(1)(a) of the Act is concerned, the Appellate Tribunal agreed with the finding of the App....