TMI Blog1987 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... a gift within the meaning of section 4 of the Gift-tax Act ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the trustees of the wedding gift trust had no right over these swords except the right to keep them in safe custody ? (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that neither of the trusts was the legal or lawful owner of the swords ? (4) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that no gift was involved in the transaction of handing over the swords by the trustees and consequently no gift-tax was leviable under the Gift -t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal agreed with the Appellate Assistant Commissioner and thus the reference. The question that arises for consideration is whether there is any gift by the assessee to the princes in terms of the trust deed attracting the provisions of the Act. Before proceeding with the case, let us have a perception of the relevant provisions of the Act. "Gift" has been defined under section 2(xii) to mean the transfer by one person to another of any existing movable or immovable property made 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. "Donor" has been defined under section 2(ix) to mean any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I St day of April, 1958, a tax (hereinafter referred to as gift-tax) in respect of the gifts, if any, made by a person during the previous year (other than gifts made before the 1st day of April, 1957), at the rate or rates specified in the Schedule." The relevant provisions to include certain transfers is sections 4(1)(a) and. 4 (1) (c) which read thus : "4. (1) For the purposes of this Act, (a) where property is transferred otherwise than for adequate consideration, the amount by which the market value of the property at the date of the transfer exceeds the value of the consideration shall be deemed to be a gift made by the transferor : - . . . (The proviso is not relevant. Hence omitted). (c) where there is release, disch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the two swords, which are material for the purpose of this case reads thus : "(3) (c) On the marriage of Prince Mukarram Jah, one of the grandsons of the settlor by his eldest son, Prince Azam Jah, the Prince of Berar to give the sword known as "SHAMSHEER MURRASSA HURD mentioned in item 2 (two) of the First Schedule hereunder written to the said Prince Mukarram Jah as "Sarapa" or wedding gift to him from the settlor along with other jewellery which may be given to him as Sarapa on the occasion. Provided, however, that if, God forbidding, the said Prince Mukarram Jah shall die before his marriage shall take place, the said sword shall be held by the trustees upon the same trusts as those upon which the principal fund is hereby directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dates of their wedding does not take away the legal effect. The assessees did not become the donors on their handing over the swords to the donee-beneficiaries. They continued to be the donee-agents on behalf of the princes till the date of actual handing over. Their responsibility is fiduciary in character. No doubt, H.E.H. the Nizam executed a trust deed on September 4, 1951, and in clauses 6 and 7 which are material for the purpose of this case, the settlor referred to the gift of these two swords in his first trust deed dated March 29, 1951, and expressed his wish that the princes, after receiving the said swords as part of Sarapa, on their wedding, hand over and entrust the same to the trustees under the first trust to be held by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the swords on the dates of their marriage and thereby they became owners. The trustees are obliged to hand over the swords to them on the dates of their marriage. Thereby, clauses 6 and 7 of the second trust deed speaks out only a mere wish or a pious hope in the belief that the settlees would abide by the wish of their grandfather to return the swords to the trustees. It may be in vogue on compliance with the wish of their grandfather. When they are handed back, they may become the corpus of the trust. But it is open to them to defy the wish of the settlor and choose to remain absolute owners in terms of sub-clauses (c) and (d) of clause 3 of the first trust. Therefore, we have no hesitation to hold that the second trust does not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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