COMMISSIONER OF INCOME TAX Vs. ABHIJIT SEN

JUDGEMENT

(1.) THIS is a reference under s. 66(1) of the Indian IT Act, 1922.

(2.) THE assessment year involved is the year 1960-61, corresponding to the previous year ended on September 30, 1959.

(3.) SEC. 16(3) speaks not only of the direct transfer of assets to the wife but also speaks of indirect transfer and since these were done on the same date, this is obviously the case of indirect transfer of assets, which attracts the provisions of cl. (iii) of sub-s. (a) of s. 16(3) of the Indian IT Act. There is no question of agreement to live apart in this case and, in spite of specific opportunity given to the assessee, the assessee has not come forward with any consideration adequate or otherwise for which the transfer was made. It was, however, contended by the assessee that he gifted not only 10,000 shares but actually 15,000 shares, 5,000 of which were gifted of his sister. This does not, however, in any way change the position of law in so far as the transfer of 10,000 shares indirectly to the wife are concerned. The assessee appealed against the assessment order before the AAC. The AAC allowed the appeal, relying on a decision of the Madras High Court in C. M. Kothari vs. CIT (1958) 34 ITR 317. The reasons which weighed with the AAC are quoted hereinbelow :