1983 (2) TMI 9

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.... is exempt under section 5(1)(v) of the Gift-tax Act, is sustainable in law ? " The assessee in this case made a gift of a property worth about Rs. 2,50,000 to " Ram Sita Educational Trust. " When the GTO proposed to bring that gift to charge the assessee contended that she was entitled to exemption under s. 5(1)(v) of the G.T. Act in respect of the said gift. This contention was rejected by the GTO on the ground that she was not entitled to exemption in respect of the said gift, as it was all initial gift made by the assessee to the Trust. The assessee took the matter in appeal to the AAC and the AAC accepted the contention of the assessee that the gift was exempt under s. 5(1)(v) of the Act. The Revenue took the matter further in appea....

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....d be taken have been established for the purpose of the acceptance of the gift. Even though the gift and the establishment of the trust are simultaneous still for the purpose of s. 5(1)(v), the trust or fund should be taken have come into existence a moment prior to the actual gift itself. A perusal of the settlement deed executed by the assessee on July 5, 1969, shows that trust known as the Ram Sita Educational Trust was created and the properties referred to in the settlement were gifted to that trust. Thus in point of time, the trust should be taken to have been created first and the gift should be taken to have been made to that trust, though both the gift and the creation of the trust were made under the same document. This view of....

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....ave no manner of doubt about its meaning. The court also expressed its opinion that if subsequent gifts made to the trust were entitled to exemption, there was no reason why the initial gift alone should be denied exemption, that the very initial gift by which the fund started constituted the part to which the further gifts were added, that all the gifts together formed the fund, and that, if the subsequent gifts which were parts of the fund itself were gifts to the fund, the initial gift which started the fund itself could as well be a gift to the fund and as such entitled to the exemption. The same view has also been taken in CGT v. Lachman Dass Oswal [1977] 106 ITR 742. In that case also, the gift and the creation of the trust were ma....