COMMISSIONER OF GIFT TAX Vs. SHANMUGASUNDRAM K N

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal referred the following question for the opinion of this court under section 28(1) of the Gift-tax Act, 1958 (hereinafter referred to as "the Act") :

(2.) ON July 27, 1972, the assessee created a trust deed and registered the same on the same date. In the trust deed, it is stated that the house property at No. 33, Sullivan Garden Road, Madras, valued at Rs. 95,000 was given as a gift to the trust called Shanmugasundaram Educational Trust. The assessee-trust claimed exemption under section 5(T)(v) of the Act. According to the Department when the gift was made, the trust was not in existence, since the creation of the trust and gifting of the property were on the same date. Therefore, the Gift-tax Officer refused to grant exemption under section 5(l)(v) of the Act. ON appeal, the Appellate Assistant Commissioner agreed with the assessee that the assessee is entitled to exemption under section 5(l)(v) of the Act, since the gift was made after the trust was created. In order to come to this conclusion, reliance was placed upon the decision in CGT v. Yogendra N. Mafatlal [1965] 58 ITR 40 (Bom) and CGT v. Lachhman Dass Oswal . ON further appeal, the Tribunal agreed with the view taken by the Appellate Assistant Commissioner.