COMMISSIONER OF GIFT TAX Vs. KUPPULAKSHMI AMMAL

JUDGEMENT

(1.) THE questions which have been referred to this court at the instance of the Revenue are as follows :

(2.) WHETHER, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the transfer made by the assessee in favour of her two sisters of certain lands and the transfer made by the two sisters in favour of the assessee conveying certain other lands to the assessee were not independent transactions of gift under the Gift-tax Act, 1958, but amounted to an 'exchange' as defined under section 118 of the Transfer of Property Act, 1882 ?"

(3.) IN Prabhu Dia v. Shadi Ram, AIR 1919 Lahore 246, it was held by Broadway J. that it is for the courts to decide, not only on the document itself, but on all the materials on the record, whether the transaction was a sale or an exchange. IN that case, two deeds of sale were drawn up on the same day and it was held that the transactions were proved to be an exchange and not a sale. This principle was reaffirmed by a Division Bench of the Allahabad High Court in Kishen Lal v. Ram Lal, AIR 1927 All 696, wherein it was laid down that extrinsic evidence is admissible for the purpose of showing that two documents, though purporting to be separate sale deeds, are in reality part and parcel of the same transaction which was one of exchange. On the evidence in that case, it was held that the transaction amounted to an exchange.