KEWAL KRISHAN KUTHIALA Vs. COMMISSIONER OF GIFT-TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Amritsar, has referred to us the following question of law for our opinion:

(2.) THE GTO, however, did not allow exemption. In his view, Section 5 (1) (ii) of the G. T. Act did not permit the assessee to claim the gift as exempt.

(3.) THE assessee's appeal, however, was allowed by the AAC, who took the view that no charge under Section 3 of the Act was created, inasmuch as, the subject-matter of the gift was not situated within the taxable territories as defined in Sub-section (2) of Section 1. As a sequal thereto, it was held that unless charge was created, it was futile to make scrutiny of the exemption under Section 5 (1) (ii) of the Act. In this view of the matter, the assessment was set aside. The Revenue took the matter in appeal before the Tribunal. The view of the AAC was upset and that of the GTO restored. The Tribunal observed: "the exemption in respect of movable property situated in Jammu and Kashmir, is not absolute or unqualified, but it is subject to certain conditions. If the movable property outside India is owned by an individual who is both a citizen and at the same time 'ordinarily resident' in India, then the gift-tax will be chargeable. " Mr. K. K. Kuthiala, the assessee, them approached the Tribunal to refer the aforementioned question of law to this court.