COMMISSIONER OF GIFT TAX Vs. MATILDA FERREIRA

JUDGEMENT

(1.) THIS reference is at the instance of the revenue and it relates to the gift -tax assessment for the assessment year 1959 -60 for which the relevant previous year ended on March 31, 1959.

(2.) SMT . Matilda Ferreira, the assessee, is an individual. On June 18, 1941, by his letter addressed to the Municipal Corporation of Bombay one, S. Rodrigues offered to purchase two plots of land, namely, plots Nos. 14 and 15 admeasuring 2,414 sq. yds. and 2,259 sq. yds. respectively, situate at Mahim Bazar Cross Road at the rate of Rs. 8 -8 -0 per sq. yd. Along with this offer an earnest amount of Rs. 3,973 was paid and the balance of the price of Rs. 35,747 -8 -0 was to be paid within one month from the date of the receipt of the intimation that the land was ready for being handed over. There was a superstructure on the plot which was also offered to be purchased for Rs. 300. Clause 9 of the letter contains one of the terms on the basis of which the offer to purchase was made and it runs as under :

(3.) SO far as the possession of the two plots Nos. 14 and 15 was concerned, the same was handed over to the assessee some time after July 16, 1941. Plot No. 14 remained vacant. Plot No. 15 was leased out to one A. P. Bhatia for a yearly rental of Rs. 7,800. Bhatia thereafter constructed a building. Flats in the said building were given over to some persons on ownership basis. There was some litigation between A.P.Bhatia and the assessee and between the assessee and the occupants subsequent to the aforesaid lease. the rent of Rs. 7,800 that was received from A.P.Bhatia was assessed to income -tax by the taxing authorities in the hands of the assessee, though it was not returned by her for the assessment year 1956 -57 and thereafter. The rent receipts continued to be credited to her bank account even after the documents were executed in favour of Mrs. Francisca Ferreira by the Municipality. The amounts received as and by way of rent were said to have been utilised to meet the expenses of the litigation. There is no controversy between the parties that Mrs. francisca Ferreira, who is the daughter -in -law of the assessee, became the owner of the both the plots and after June 6, 1958.