2006 (5) TMI 84

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....lding that the assessee was under a bona fide belief that the amount in question was not chargeable to gift-tax and as such no penalty under section 17(1)(c) is leviable ?" 3. Briefly stated the facts are that the assessee the late H. H. Maharana Bhagwat Singh of Mewar (now represented through his son and his legal heir M. K. Arvind Singh) in response to notice under section 16 of the Gift-tax Act had filed a return declaring value of taxable gifts at nil. In the assessment completed under section 15(3) on March 3, 1979, the Gift-tax Officer held that the following amounts were chargeable to gift-tax. 4. The assessee during the year under consideration sold his 1/4^th share in the property known as Daisylea House situated at Bombay fo....

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....ingh, son in addition to 'hath kharcha' allowance of Rs. 23,404. This payment was not treated as paid for maintenance purposes and treated as gift. 6. The assessment was completed on a taxable gift of Rs. 3,84,800. Simultaneously proceedings to levy penalty under section 17(1)(c) of the Gift-tax Act were initiated as according to the Gift-tax Officer, the assessee has concealed particulars of taxable gift. After affording an opportunity to the assessee, the Gift-tax Officer levied penalty for Rs. 32,600. The Commissioner of Income-tax (Appeals) cancelled the penalty on the ground that the assessee had disclosed all material facts in the letter filed along with the return of income about the 'Hath Kharch' allowance and although it was a g....

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....be maintenance, which were deemed to be the gift, subject to tax, have been disclosed along with the return. It was not a case of concealment of particulars of any transfer. It was not a case of concealment of any particulars of any gift or deliberately furnishing inaccurate particulars at all but was claim of the assessee that the disbursement of amount was part of discharge of his obligation of maintenance towards members of his family and that consideration disclosed, in sale was correctly disclosed, which was also found to be genuine by the Gift-tax Officer. Thus, there being no case of concealment of particulars or furnishing of inaccurate particulars was made out. Merely because the assessee has claimed that disbursement of sum did no....