TMI Blog1996 (8) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995, in W. T. A. Nos. 31, 60, 61 and 62/Ind of 1992 for the assessment years 1987-88 to 1990-91, for consideration : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the gift of Rs. 10,50,000 made by the karta of the assessee-HUF out of the HUF's funds by delivery of the amount to the donee was void ab initio and the said amount continues to be an asset belonging to the assessee-HUF and the same is includible, while computing the net wealth of the assessee-HUF for wealth-tax purposes?" Briefly stated, the facts of the case are that the assessee is a Hindu undivided family. The karta of this family during the year under consideration made a gift of cash amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal, on appeal by the Assistant Commissioner of Income-tax, vacated the order of the Deputy Commissioner of Wealth-tax (Assessment) in Appeals Nos. 31, 60 to 62/Ind of 1992 and Nos. 33, 63 to 65/Ind of 1992 for the assessment years 1987-88 to 1990-91 and restored the one passed by the Assessing Officer. The assessee now seeks opinion via references, Four factors and features stare in the face : (i) Gift-tax has been admittedly levied on the aforesaid amount as is clear from the order of gift-tax assessment. (ii) No coparcener of the Hindu undivided family has oppugned the gift or protested about gift-tax. (iii) No provision of law is pressed into service which may compel the assessee to suffer double jeopardy of taxation, i.e., paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax, then levy of gift-tax was impermissible. Vice versa, when gift-tax is levied, then it would be grotesque to impose liability of wealth-tax too. It is here that the Revenue is purposefully silent, little realising that silence is not always golden. In slashing taxes, India is in excellent company. In 1979, Ireland abolished wealth-tax. Germany substantially lowered it. The USA cut capital gains tax and the U. K. reduced its maximum personal rate of personal tax from 83 to 60. After even nine and forty years since independence, India has 15 per cent. of the world's population, but has only 1.5 per cent. of the world's income. Today, India, poised to usher in the 21st century, is still the 21st poorest nation on earth. And litigative i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if a gift by the karta is void ab initio in terms of section 2(xii) then why was gift-tax imposed? And after this event treating the gift as valid and levying gift-tax, can the authorities somersault and speak about validity for gift-tax and invalidity for wealth-tax? This proclivity of plus and minus has to perish. No person or authority should be permitted to slip under the umbrella of inconsistent positions. We are not shown any provision of law which could first permit levy of gift-tax and then levy of wealth-tax on the same property. In fact one is mutually destructive of the other. The New Testament II Corinthians III 6 highlighted that The letter killeth, but the spirit giveth life. It is a case of taking wealth-tax but not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if there was no levy of gift-tax on the same amount. The Revenue has no solution to this big "if" and remains unable to unknot the conundrum. Law and justice have to be seen to live in harmony. We thus answer the question in both these cases in the negative, i.e., against the Revenue and in favour of the assessee. Strangely enough, the validity of gift was considered in wealth-tax proceedings. These miscellaneous civil cases are thus decided in the terms indicated above but with no orders as to costs. Counsel fee for each side in each case is, however, fixed at Rs. 750 if certified. Transmit a copy of this order to the Tribunal for further action in the light of our answer in conformity with law. Retain this order in Income-tax Ref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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