TMI Blog1977 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... gift for the purpose of education of the donees under section 5(1)(xii) of the Gift-tax Act, 1958 ? " By four documents all dated December 1, 1969, the assessee made gifts of his immovable properties to his four children, viz., (1) Ranjit, studying in the IVth Standard, (2) Eapen studying in the S.S.L.C. Class, (3) George, studying for B.Sc., and (4) Miss. Annie John, studying for B.A. The assessee filed a gift-tax return wherein he showed the valuation of his property at Rs. 1,74,080. The entire sum was claimed to be exempted under section 5(1)(xii) of the Gift-tax Act, on the ground that the gifts were for the education of his children. That they were to meet the educational needs of the donees had been expressly mentioned in the gift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the Appellate Assistant Commissioner enhanced the estimated amount required for educational purpose of all the donees to Rs. 1,69,080. He also reduced the valuation. As regards the claim for exemption he agreed with the assessee that the Gift-tax Officer erred in taking into account the income from the gifted properties. He was of the view that the income from the gifted properties is not an element forming part of " the circumstances of the case " to be taken into account for determining the reasonable amount allowable under section 5(1)(xii). There was a further appeal by the department to the Appellate Tribunal. The contention of the department was that the income from the gifted properties during the period of the donees' educat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sferred by way of gift shall, subject to the provisions of sub-sections (2) and (3), be estimated to be the price which in the opinion of the Gift-tax Officer it would fetch if sold in the open market on the date of which the gift was made. (2) Where a person makes a gift which is not revocable for a specified period, the value of the property gifted shall be the capitalised value of the income from the property gifted during the period for which the gift is not revocable. (3) Where the value of any property cannot be estimated under sub-section (1) because it is not saleable in the open market, the value shall be determined in the prescribed manner. " The contention of the assessee is that once the market value of the " property " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t seems difficult for this court to lay down with precision, as pressed by counsel for the revenue, the guidelines to be applied in reckoning the extent of the property which can be said to be reasonable having regard to the " circumstances of the case ". Discretion counsels us to leave the officer to his own resources, and to correct him where he is shown to be wrong. We are clear that the principle stated by the Tribunal that having evaluated the market value of the property, the income cannot thereafter be taken into account for assessing the gift-tax is correct on principle. We do not think, on the facts of this case, any further guidelines or principles by way of answer to the question is called for. In the result, we answer the que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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