2004 (9) TMI 86

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..... ft-tax Act, 1958, hereinafter referred to as "the Act", for opinion to this court. "1. Whether, on the facts and circumstances of the case, the Gift-tax Officer was legally correct in initiating proceedings under section 16(1) of the Gift-tax Act, 1958, against the deceased assessee, Nabi Shah, for the assessment year 1976-77 on the basis of the report of the internal audit party? 2. Whether, on .....

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..... , there was a deemed gift on the part of the assessee to the remaining partners of the firm who remained in the partnership after September 30, 1974. On the basis of the said audit report the Gift-tax Officer issued a notice to the assessee under section 16(1) of the Act. Pursuant to the notice the assessee filed a return of gift-tax declaring the taxable gift at nil. The Gift-tax Officer, however .....

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..... for taking proceedings under section 16(1) of the Act. The apex court in the case of Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996 has laid down that the report of the internal audit party on a question of law does not constitute information so as to enable the Income-tax Officer to initiate proceedings under section 147(b) of the Income-tax Act. As in the present case, the report .....

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