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TMI Blog2014 (11) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; "Whether the appellate tribunal is right in law and on facts in deleting gift tax levied by invoking the provisions of section 4(1) of the Gift Tax Ac and in doing so, erred in interpreting section 15(6) read with Rule 11A of the Income Tax Act and the Rules ?" 3. The facts of the present case are that the assessee has filed return of Gift Tax on 31.5.1991. The notice under sec. 16(1) of the Gift Tax Act was issued to the assessee. In response to the said notice, the assessee has shown the value gift made during the previous year at Rs. Nil. Thereafter, after considering the material on record, the assessment order came to be passed. Against the said assessment order, an appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "48. Section 21 of the Amending Act has amended section 15 of the Gift-tax Act which a view to enabling the Gift-tax officer to refer the valuation of any property transferred by way of gift to the Valuation Officer for ascertaining the market value of such property. References under the new provision will lie only after 31st December, 1972, as the provision of section 21 of the Amending Act will come into force with effect from 1st January, 1973. Under the new provision, the Gifttax Officer may refer the valuation of any property to a Valuation Officer in a case where the assessee has got the property valued by a registered valuer and the Gift-tax Officer is of opinion that the value as esti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; 2.6 Coming to the legal aspect of the case it is seen that the obitery by the Hon'ble High Court in the case of Venesta Foils Ltd. (supra) makes it very clear that when a transfer is between a holding and subsidiary company there is no gift. It will be pertinent to reproduce the obitery of the Hon'ble Court- "Gift basically is a transfer by one person to another person. In this case there was really no such transfer since the V.G. Ltd, the alleged donor owned all dhstr of the Ltd. the alleged dones. Viewed in this light also there was no gift in respect of impugned transaction as defined in Sec.2 clause (xii)." I would therefore hold that the addition made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on 31.3.84 is Rs. 178.49 lakhs whereas the realised value shown by the assessee is Rs. 143.50 lakhs. The difference being merely Rs. 35 lakhs which is much less than the percentage prescribed in Gifttax Rules or Wealth-tax Rules. The Ld. DR made a valiant effect to support the department's case by pointing out that since the difference is more than 50,000/-in the instant case, rule 11A of the GT Rules is attracted. 7. We are not impressed with this argument. Rules do not specifically provide that the lesser of the two figures 50,000 or 1/3% of the declared value is to be adopted. There is therefore, no justification for rewriting the rule by adding the words "whichever i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer is involved if the donor viz. V. Foils Ltd. owns all the share of the alleged dones viz. India Foils Ltd. However, the decision of the High Court has not been based on this premise as specifically pointed out by their Lordships. This decision may therefore render no direct support to the assessee's case. However, the circumstance that the transderee in the instant case is a 100% subsidiary company and the difference in the sale consideration and the market value estimated by the DVO is much less than the prescribed percentage of 33 1/3% as per rule 11A of the GT Rules support the bonafide of transaction. In our opinion, this is not a fit case for invoking the provisions of sec. 4(1)(a) of the GT Act for treating the sale transaction as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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