POLAKI BUCHI BABU Vs. COMMISSIONER OF GIFT TAX

JUDGEMENT

(1.) THE Tribunal, Cuttack Bench, has stated a case under S. 26(3) of the GT Act, 1958 (for short, "the Act"), and has referred the following question of law for the opinion of this Court :

(2.) DURING the accounting year 1971 72 (ending on 31st March, 1972), the petitioner, Polaki Buchi Babu, was a partner in the firm, M/s Polaki Srirangam & Sons. On 31st March, 1972, he put his share capital of Rs. 2,45,599 in the common hotchpot of the joint family consisting of himself, his wife and children. He, however, did not submit any return under the Act under the impression that it did not amount to a gift within the meaning and mischief of S. 4(2) of the Act. The GTO, however, issued notice to the petitioner under S. 16(1) and another notice under S. 15(4) of the Act and completed the assessment under S. 15(5) holding that the blending of the share capital in the joint family account amounted to a gift within the meaning of S. 4(2) of the Act, and the share of the five members of the petitioner's family being Rs. 2,04,670 was liable to be assessed to gift tax. Accordingly, by his order dt. 7th Dec., 1976, he assessed the said amount to gift tax.

(3.) BEFORE referring to the relevant provisions of the Act, I may indicate that the whole argument of the petitioner is based upon the fact that on 31st March, 1972, when the petitioner blended his share capital in the common hotchpot, the amending Act had not come into force and, therefore, the transfer of his share capital did not amount to making of a gift.