TaxTMI 
TaxTMI 
1987 (1) TMI 50
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....mon hotchpot constituted gift as defined by the amending Act so as to be liable to tax thereunder for the assessment year 1972-73 ? " During the accounting year 1971-72 (ending on March 31, 1972), the petitioner, Polaki Buchi Babu, was a partner in the firm, M/s. Polaki Srirangam and Sons. On March 31, 1972, he put his share capital of Rs. 2,45,599 in the common hotchpot of the joint family consisting of himself, his wife and children. He, however, did not submit any return under the Act under the impression that it did not amount to a gift within the meaning and mischief of section 4(2) of the Act. The Gift-tax Officer, however, issued notice to the petitioner under section 16(1) and another notice under section 15(4) of the Act and com....
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....e voluntarily and without consideration in money or money's worth, and (includes the transfer or conversion of any property referred to in section 4, deemed to be a gift under that section)." The bracketed portion in the definition was substituted for " and includes the transfer of any property deemed to be a gift under section 4 by the Finance (No. 2) Act, 1971, with effect from April 1, 1972. This brings us at once to section 4 of the Act. In section 4, which enumerates certain transfers to be held as gifts, sub-section (2) was added by the said amending Act of 1971 with effect from the same date, i.e., April 1, 1972, and it reads as follows: " 4. (2) Where, in the case of an individual being a member of a Hindu undivided family,....
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....ed in the Gazette of India on August 10, 1971. The main contention of Mr. Mohanti is that on March 31, 1972, when the petitioner blended his share capital, the act of blending did not amount to an act of making a gift by the petitioner as, on that day, according to the definition of " gift ", this did not amount to a gift within the meaning of section 2(xii) of the Act. Learned counsel further submitted that inasmuch as the amending Act was not made retrospective and was only prospective, it would not apply to any transaction of gift which had taken place prior to the date of coming into force of the amending Act. In order to appreciate this submission, it is relevant to see section 3, the charging section, which reads as follows: ....
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....e of section 3 of the Gift-tax Act, being similar to that of section 4 of the Income-tax Act, some cases under the Income-tax Act may also be noticed which are relied upon by learned standing counsel for the Department. In the case of CIT v. Isthmian Steamship Lines [1951] 20 ITR 572, while dealing with the case under the Income-tax Act, the Supreme Court held as follows (p. 577): "It will be observed that we are here concerned with two datum lines: (1) the 1st of April, 1940, when the Act came into force, and (2) the 1st of April, 1939, which is the date mentioned in the amended proviso. The first question to be answered is whether these dates are to apply to the accounting year or the year of assessment. They must be held to apply t....