COMMISSIONER OF GIFT TAX KERALA Vs. GEORGE KURUVILLA

JUDGEMENT

(1.) By our order dated 1-1-1969, we directed the Income-tax Appellate Tribunal to submit a supplementary statement of the case together with a copy of the deed of gift dated February 3, 1960 executed by the respondent. The Tribunal has submitted the supplementary statement of the case together with a copy of the deed of gift executed by the respondent on February 3, 1960.

(2.) The respondent is a medical practitioner. By the deed dated February 3, 1960 he has given to his son Thomas four items of property: (1) one-fifth share in cardamom estate valued at Rs. 3,030.80; (2) 1.38 cents of garden land valued at Rs. 4,500; (3) G. K. Hospital Building erected on the garden land valued at Rs. 17,250; and (4) Othi rights valued at Rs. 6,000.

(3.) In response to a notice under Section 13 (2) of the Gift Tax Act 18 of 1958 the assessee filed a return for the assessment year 1960-61 disclosing taxable gifts of property valued at Rupees 27,251. But he claimed exemption in respect of Item No. (2), i. e. the garden land. In the course of the hearing the respondent claimed that the G. K. Hospital Building Item No. (3) was also exempt from liability to gift-tax because of Section 5 (1) (xiv) of the Gift-tax Act. It was the case of the respondent that his son Thomas had graduated in the medical science at an examination held in December 1959 and had joined the respondent's profession as a House Surgeon in July 1960, and on the account the gift in respect of Items (2) and (3) were exempt from liability to tax. The Gift-tax Officer rejected the claim. The Appellate Assistant Commissioner confirmed the order of the Gift tax Officer. The Appellate Tribunal held that the respondent was entitled to exemption in respect of Items (2) and (3).