ASHOK KUMAR PODDAR Vs. COMMISSIONER OF GIFT TAX

JUDGEMENT

(1.) In this reference under Section 26(1) of the Gift-tax Act, 1958, for the assessment year 1973-74, the following questions have been referred to this court :

(2.) Shortly stated, the facts are that the assessee bequeathed his one-sixth share in certain leasehold land and structures thereon subject to the mortgage in favour of the United Bank of India to Smt. Shradha Poddar, a minor. This gift was made under a deed of gift dated June 26, 1972. The assessee filed a return declaring the value of the gift at Rs. 8,549 only. The Gift-tax Officer, however, determined the value of the gift at Rs. 1,75,000 by his order dated March 28, 1979. The assessee appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner was of the view that the assessment required enhancement and accordingly, he issued a notice to the assessee intimating, inter alia, that the value of the leasehold interest in the above property as on the date of gift would work out to Rs. 5,45,700, which will be the value of the taxable gift for the assessment year in question, i.e., 1973-74, as against the value of the taxable gift of Rs. 1,75,000, determined by the Gift-tax Officer. The assessee replied to the proposed enhancement contending that it was much too excessive. The Appellate Assistant Commissioner dealt with the contentions of the assessee and he came to the finding that the yield rate of 5.5 per cent. was justified in the facts and circumstances of this case and he has given elaborate reasons therefor.

(3.) At the time of hearing before the Appellate Assistant Commissioner a contention was raised that the gifted property consisted of two leasehold properties and the unexpired period of lease varied in the two cases. The Appellate Assistant Commissioner dealt with this contention in the manner following :