COMMISSIONER OF WEALTH TAX Vs. MAHAVIRPRASAD BUBNA

JUDGEMENT

(1.) THE question in this reference relates to the correct interpretation of s. 4(1)(a)(ii) of the W.T. Act, 1957, and it relates to the assessment year 1963 -64 for which the corresponding valuation date was October 28, 1962.

(2.) THE respondent -assesses are six brothers. They along with their grandfather were partners in a firm called Brijmohan Kaluram. On July 23, 1962, these six assesses -partners purported to make gifts of Rs. 50,000 each to the minor sons or daughters of the other brothers. Such gifts were effected by issue of cheques and evidenced by declarations of gifts. On voluntary returns filed by the brothers they were subjected to gift -tax under the G.T. Act. The particulars of the gifts and the names of the do ness are as under :

(3.) IN the separate appeal filed by each of the assessee the finding of the WTO was confirmed by the AAC. According to him, what each brother gave to his brother's child or children was again received by his child or children in a circuitous manner. The asset in the course of being transferred has been deliberately changed into the asset of a like value of another person. All the transfers were effected on the same day and all the transaction were of equal amount, but the transfers were effected with a deliberate scheme of avoidance of tax under s. 4(1)(a) of the Act. All the transactions were intimately connected and they cannot but be regarded as parts of a single transaction. The transaction according to him also appeared to be of a collusive nature even though the gifts were supported by declarations and gift -tax had been paid. He took notice of the fact that each brother showed much more love and affection for his brother's child or children rather than his own. According to him, the transaction could not be taken at their face value and he had no hesitation in holding that the assets held in the name of the minor child or children were properly included in the net wealth of the assessee.