SHRI ARJUNDAS Vs. COMMISSIONER OF GIFT TAX

JUDGEMENT

(1.) THIS reference is made under Section 26(1) of the Gift Tax Act, 1958 (for short 'the Act') by the Income Tax Appellate Tribunal, Hyderabad Bench "A" (for short 'the Tribunal').

(2.) THE circumstances that led to the making of the reference are as under:

(3.) IN the income tax returns submitted for the assessment year 1987 -88, the value of the building was shown at Rs. 6,21,000/ -. While processing the returns, the Income Tax Officer, who also happens to be the authority under the Act, took the view that a transaction of gift has taken place from the applicant herein to his mother, to the extent of his one -third share in the house. In addition to that, he assessed the value of the house at Rs. 20,28,750/ - through the method of capitalisation. Accordingly, he proposed to levy gift tax at Rs. 1,34,775/ -. After considering the explanation submitted by the applicant, the assessing authority confirmed the levy and demand.