COMMISSIONER OF GIFT TAX Vs. SHAHAJI CHHATRAPATI

JUDGEMENT

(1.) AT the instance of the CGT, this reference has been made under sub-s. (1) of s. 26 of the GT Act (hereinafter referred to as the Act). The assessee before us is His Highness Sir Shahji the Chhatrapati Maharajasaheb of Kolhapur. The assessment year with which we are concerned is 1958-59, the relevant previous year being one commencing from 1st April, 1957, and ending with 31st March, 1958, and the question to be considered is :

(2.) THE assessee executed a settlement of January 18, 1956 setting apart certain agricultural lands valued at Rs. 5 lakhs in trust. THE income of this property was to be utilised in the manner indicated in the said deed. THE deed mentions that there are several public temples in the State of Bombay and Hyderabad for the upkeep and maintenance of which the assessee had been for several years contributing. THE assessee was desirous of making and declaring a religious and charitable trust in respect of the said lands and giving the trustees certain directions. Clause (3) of the trust deed shows that the income was, inter alia to be utilise :

(3.) THE assessee had also executed a fourth trust deed setting apart certain properties in trust for a trust named "Chhatrapati Charitable Aid to the deserving trust". Under this trust deed the assessee had further settled properties valued at Rs. 45,500. THE gift made under this fourth trust deed was also sought to be brought to tax by the Revenue. THE Tribunal, however, held that the assessee was entitled to exemption in respect of the amount gifted under this trust. THE reference which has been made to us does not include this amount, the Department having given up the amount in respect of this trust at the time of making the reference. It is, therefore, not necessary to narrate the terms and conditions of this trust deed. Now, we are here concerned only with the gifts made under the aforesaid second and third settlement deeds of 1st October, 1957, and 1st November, 1957. It would be noticed that these gifts under the aforesaid trust deeds have been made between the period 1st April, 1957, and 31st March, 1958. At this stage it may be mentioned that the Act came on the statute book on 15th May, 1958, and s. 3, which is the charging section, provided :