TMI Blog1970 (4) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... tax merely because the property is used for the purpose for which it was used by the donor. Without deciding whether the test of " commercial expediency " is strictly appropriate to the claim for exemption under section 5(1)(xiv), we are of the view that there is no evidence on the record to prove that the gift to Thomas was " in the course of carrying on the business " of the donor, and " for the purpose of the business. " Appeal is allowed and the order passed by the High Court is set aside - - - - - Dated:- 24-4-1970 - Judge(s) : J. C. SHAH., K. S. HEGDE., A. N. GROVER JUDGMENT The judgment of the court was delivered by SHAH J.--By our order dated January 1, 1969, we directed the Income-tax Appellate Tribunal to submit a suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner confirmed the order of the Gift-tax Officer. The Appellate Tribunal held that the respondent was entitled to exemption in respect of items Nos. (2) and (3). At the instance of the Commissioner of Gift-tax, the Tribunal referred the following question to the High Court of Kerala for opinion : " Whether, on the facts and in the circumstances of the case, the assessee was entitled to the exemption in respect of G. K. Hospital and the adjoining land of 1.38 cents under section 5(1)(xiv) of the Gift-tax Act ? " The High Court answered the question in the affirmative. The Commissioner of Gift-tax, Kerala, has appealed to this court. Section 5 of the Gift-tax Act provides for exemption in respect of certain gifts ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gift property had been used for any purpose other than what it had been put to while it was with the donor... " The High Court observed : " We feel it difficult to resist the conclusion that in the background and circumstances, the gift could well be regarded as having been made for the better ordering of the business of the assessee......it would be enough to show that the gift was made on grounds of commercial expediency and in order to directly or indirectly facilitate the carrying on of the business, profession or vocation. " We are unable to agree with the views so expressed. The donor is exempt under section 5(1)(xiv) from liability to pay tax only if the gift is in the course of carrying on a business, profession or vocati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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