COMMISSIONER OF GIFT TAX Vs. ANSUYA SARABHAI DECD

JUDGEMENT

(1.) AT the instance of the Revenue, a question of law has been referred to us by the Tribunal, Ahmedabad Bench 'A', for our opinion under S. 26(1) of the GT Act, 1958. The said question reads as under :

(2.) THE relevant facts leading to this reference may now be stated. Assessee, Smt. Ansuya, was the sister of late Shri Ambalal Sarabhai. Late Shri Ambalal Sarabhai created a trust whereby he transferred to the trustees, who were the members of his family, certain shares with a direction that the net income of this trust property, that is, shares, should be given to the assessee, Smt. Ansuya Sarabhai, during her lifetime for her absolute use and benefit. After the death of Smt. Ansuya Sarabhai, the trustees had to transfer and assign the trust property absolutely to the children and grandchildren of late Ambalal Sarabhai in certain specified proportions, as mentioned in the deed of settlement dt. 30th Aug., 1949.

(3.) AGAINST the decision of the AAC, the GTO filed an appeal to the Tribunal. The Tribunal, after hearing the arguments of both the sides, came to the conclusion that on an interpretation of the relevant recitals in the release deed, it was apparent that the assessee had not passed on her life interest to the ultimate beneficiaries by the document in question, but the assessee had released the trust from its responsibility for giving the income to the assessee during her lifetime and had made it clear that the ultimate beneficiaries may at once assume and retain possession and enjoyment of the corpus. Thus, the right of the ultimate beneficiaries to resume the corpus had been accelerated by the deed and they had been made full owners of the shares. In that view of the matter, the Tribunal held that the document in question did not effect any transfer which could be covered by the provisions of the GT Act, 1958. As stated earlier, dissatisfied, the Revenue sought a reference on a question of law to this Court from the Tribunal and the Tribunal, accordingly, granted the said request of the Revenue and that is how the question of law referred to us for our opinion has resulted in the present reference.