JAGMOHAN GOKULDAS SHAH Vs. COMMISSIONER OF GIFT TAX

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal has referred to this court the following two questions of law for opinion under section 26(1) of the Gift -tax Act, 1958 :

(2.) THE first question is at the instance of the assessee while the second one is at the instance of the Department. It was fairly admitted by Shri Mehta, learned counsel for the assessee, that the question of law referred to this court at the assessee's instance is covered by the ratio of this court's decisions in the case of Shardaben Jayantilal Mulji v. CWT : [1977]106ITR667(Bom) and K M Sheth v. CGT : [1988]170ITR406(Bom) and that, in view thereof, it has to be held that the settlement in trust of the 150 equity shares of Lallubhai Amichand Pvt. Ltd. by the assessee amounted to a gift taxable under the Gift -tax Act. 1958. He, however, faintly argued that the Tribunal had given a finding that the settlement herein amounted to a gift in part only as the other part represented the amount in lieu of the obligation of thi assessee to maintain his son. It is pertinent to mention that though the Tribunal had found that the settlement in question amounted to a gift in part, it had done so on the basis of the legal provision of the Hindu Adoptions and Maintenance Act and the Gift -tax Act as it stood then, therefore, this is a decision on a question of law and the Tribunal has rightly referred the question to this court for opinion. Following the abovesaid two decisions of this court, we hold that the settlement in trust of the 150 equity shares of Lallubhai Amichand Pvt. Ltd. by the assessee amounted to a gift taxable under the Gift -tax Act, 1958.