TaxTMI 
TaxTMI 
1996 (8) TMI 10
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.... Nos. 67, 68, 69 and 70/Ind of 1995 arising out of the orders passed on February 28, 1995, in W. T. A. Nos. 31, 60, 61 and 62/Ind of 1992 for the assessment years 1987-88 to 1990-91, for consideration : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the gift of Rs. 10,50,000 made by the karta of the assessee-HUF out of the HUF's funds by delivery of the amount to the donee was void ab initio and the said amount continues to be an asset belonging to the assessee-HUF and the same is includible, while computing the net wealth of the assessee-HUF for wealth-tax purposes?" Briefly stated, the facts of the case are that the assessee is a Hindu undivided family.....
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....addition of this amount for the purpose of wealth-tax was liable to be deleted. The Tribunal, on appeal by the Assistant Commissioner of Income-tax, vacated the order of the Deputy Commissioner of Wealth-tax (Assessment) in Appeals Nos. 31, 60 to 62/Ind of 1992 and Nos. 33, 63 to 65/Ind of 1992 for the assessment years 1987-88 to 1990-91 and restored the one passed by the Assessing Officer. The assessee now seeks opinion via references, Four factors and features stare in the face : (i) Gift-tax has been admittedly levied on the aforesaid amount as is clear from the order of gift-tax assessment. (ii) No coparcener of the Hindu undivided family has oppugned the gift or protested about gift-tax. (iii) No provision of law is pressed....
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....e discordant position is obvious. If this amount is includible as an asset for purposes of wealth-tax, then levy of gift-tax was impermissible. Vice versa, when gift-tax is levied, then it would be grotesque to impose liability of wealth-tax too. It is here that the Revenue is purposefully silent, little realising that silence is not always golden. In slashing taxes, India is in excellent company. In 1979, Ireland abolished wealth-tax. Germany substantially lowered it. The USA cut capital gains tax and the U. K. reduced its maximum personal rate of personal tax from 83 to 60. After even nine and forty years since independence, India has 15 per cent. of the world's population, but has only 1.5 per cent. of the world's income. Today, India....
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....e appears to be vexation. Law is a leveller, not a producer of unmerited adversity. What puzzles is that if a gift by the karta is void ab initio in terms of section 2(xii) then why was gift-tax imposed? And after this event treating the gift as valid and levying gift-tax, can the authorities somersault and speak about validity for gift-tax and invalidity for wealth-tax? This proclivity of plus and minus has to perish. No person or authority should be permitted to slip under the umbrella of inconsistent positions. We are not shown any provision of law which could first permit levy of gift-tax and then levy of wealth-tax on the same property. In fact one is mutually destructive of the other. The New Testament II Corinthians III 6 hi....