COMMISSIONER OF GIFT TAX Vs. ABRAHMAM KOCHUTHOMMAN

JUDGEMENT

(1.) THE question is :

(2.) AS is evident from the question the matter arises under the Gift-tax Act, 1958, for short "the Act". The year of assessment was 1968-69. The answer to the question turns on the interpretation to be placed on Section 4(c) of the Gift-tax Act, 1958.

(3.) ADMITTEDLY, a sum of Rs. 2,50,829.73 was due to the assessee as on the 1st April, 1967, from his brother. On the 13th March, 1968, the assessee issued a lawyer's notice demanding this amount. The brother promptly replied totally denying liability. Without any protest the assessee accepted the position and wrote off the debt on the 31st March, 1968, in his account. Then for income-tax purposes he claimed the amount as a bad debt. He was no doubt worsted. He did not appeal from the decision of the Income-tax Officer. The Income-tax Officer had issued notice to the brother and in his reply the brother admitted that he owed the amount. This was opposed to what he said in his reply to the lawyer's notice issued at the instance of the assessee. It appears to us to be evident that the writing off was a pretence for a particular purpose. That purpose failed. Clearly, therefore, there was no absolute and resolute intention to give up. This in effect is the finding of the Tribunal though it has referred to very many other aspects. If there has been no abandonment no question of bona fides can arise.