(1.) By a consolidated reference at the instance of Sir Padampat Singhania (HUF), Lakshmi Pat Singhania (HUF) and Kailash Pat Singhania (HUF), the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following two questions for the opinion of this court under Sub-section (1) of Section 26 of the Gift-tax Act, 1958 (hereinafter to be referred as "the Act"): "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the reopening of the already completed assessment under Section 16(1)(a) of the Gift-tax Act, 1958, was valid?
(2.) Whether, on the facts and in the circumstances of the case, and on a correct interpretation of Sections 2(xii), 2(xxiv) and 4(1)(c) of the Gift-tax Act, 1958, the Appellate Tribunal was justified in holding that the amount of Rs. 2,20,474 surrendered or relinquished by letter dated January 17, 1969, was a taxable gift, the value of which was rightly added while making the reopened gift-tax assessment ?" 2. The material facts concerning the aforesaid two questions, in all the three cases, are common and identical in nature. It would, therefore, suffice for the decision of this reference, if we refer to the facts of only one of these cases, namely, in the case of Sir Padampat Singhania (HUF) (hereinafter to be referred as "the assessee").
(3.) The assessment year in dispute is 1969-70 with the corresponding accounting period ending on March 18, 1969. After the completion of the original assessment, the Gift-tax Officer came to know that the assessee and the other two Hindu undivided families aforesaid had a deposit of Rs. 2,20,474 each in the books of M/s. J. K. Investors (Bombay) Company Ltd. (for brief "Bombay company") as on December 31, 1968. By a joint letter dated January 17, 1969, the assessee and the other two Hindu undivided families surrendered the amounts standing to their credit in favour of the Bombay company authorising it to recoup its loss to the extent of Rs. 6,61,421.97, but these facts were not disclosed in the course of the original assessment proceedings. On gaining knowledge of the aforesaid fact, the Gift-tax Officer reopened the assessment of the assessee and that of the other two Hindu undivided families under Section 16(1)(a) of the Act.