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TMI Blog1967 (6) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... shares of a building called "Bellevue Palace" in Punjagutta, in respect of which the assessee incurred expenditure for repairs of a sum of Rs. 15,476 for the assessment year 1960-61 and Rs. 31,782 for the assessment year 1961-62. These amounts were spent on behalf of all the three of them, so that the 2/3rds share of both his sons for the year 1960-61 amounted to Rs. 10,317 and Rs. 21,118 for 1961-62. The assessee evidently relinquished his rights to recover those amounts from his sons and voluntarily filed a gift tax return under the Gift-tax Act and had himself assessed thereto and paid the tax. For the years 1960-61 and 1961-62, the assessee claimed exemption from expenditure tax for the amounts said to have been gifted by him, under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenance of the property jointly owned." Two contentions were raised before the Tribunal, viz., (1) that the amounts in question represented gifts by the assessee to his sons ; and (2) that in any case the assessee had incurred the expenditure for the benefit of other persons, viz., the sons. Regarding the first contention, it was urged before the Tribunal that the assessee had already been assessed to gift-tax on these amounts. The Tribunal, however, did not accept this contention, firstly, because that fact was not conclusive, as it was obviously to the benefit of the assessee to be assessed to gift-tax as the rate of such tax was very low compared to the expenditure-tax, and, secondly, the liability to gift-tax was determined by the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Transfer of Property Act as follows : "'Gift' is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee." Gift, for the purposes of the Gift-tax Act, is defined under section 2(xii) as under : "'Gift' means 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 of any property deemed to be a gift under section 4." It will be observed that the condition that the transfer of movable or immovable property has to be accepted by or on behalf of the donee, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nonetheless be a gift under the Gift-tax Act, so that it cannot be said that when the Expenditure-tax Act under section 5(j) used the word "gift" it is only confining to the Transfer of Property Act. It may be noted that section 5 of the Expenditure-tax Act deals with exemption from expenditure-tax. The reason for exempting such expenditure is either because it is incurred by way of capital expenditure, which naturally brings it within the purview of the Wealth-tax Act or because the expenditure was by way of certain disbursements which are exempted under the Income-tax Act or where it has attracted other tax, such as under the Gift-tax Act. If this was not so, then we would be imputing to the legislature an intention of exempting only spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en this contention of the department is unwarranted, having regard to the words "by way of", which indicate that the exemption is given to the expenditure incurred by the assessee by way of any gift and also in respect of any gift. The exemption is, therefore, both in respect of the gift itself as well as the expenditure incurred in making the gift. The two amounts which have been relinquished in favour of the sons by the assessee, which amounts were recoverable from them and which amount to gifts within the meaning of section 4(c) of the Gift-tax Act, are also gifts within the definition of section 5(j) of the Expenditure-tax Act. In that view, those two items are exempt from expenditure-tax. Our answer to the question, therefore, is in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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