COMMISSIONER OF GIFT TAX Vs. SATYANARAYANAMURTHY C

JUDGEMENT

(1.) THIS reference involves the proper interpretation of clauses (xii) and (xxiv) of section 2 read with sections 3 and 4 of the Gift-tax Act, 1958 (hereinafter referred to as the Act). The question we are required to answer in this reference is formulated in these words :

(2.) THE facts giving rise to this reference lie in short compass and may be stated as follows : One Sri C. Malakondaiah, who was the manager of a joint Hindu family consisting of himself and his five sons, thought of throwing his self-acquisitions into the common stock. This result he wanted to achieve by a declaration executed on the 1st day of May, 1957. It reads as follows :

(3.) THE Gift-tax Officer rejected the contention of the assessee and taxed the difference between the value of the property so converted and the value of the share which remained in the hands of Malakondaiah. This view of the Gift-tax Officer was affirmed by the Appellate Assistant Commissioner on appeal by the aggrieved assessee.