COMMISSIONER OF GIFT-TAX Vs. TARLOK SINGH

JUDGEMENT

(1.) AT the instance of the Commissioner of Gift-tax, Patiala, the following question of law had been referred to this court for its opinion by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in affirming the order of the Appellate Assistant Commissioner of Gift-tax cancelling the assessment order passed by the Gift-tax Officer against the assessee ?"

(2.) THE assessee, an agriculturist, is a Jat Sikh by caste. During the course of the wealth-tax proceedings, it was noticed by the Gift-tax Officer that the assessee had transferred agricultural land measuring 70 kanals 12 marlas to his four major sons ; Sarvshri Gurpal Singh, Rachhpal Singh, Gurdial Singh and Hardial Singh, by virtue of a court decree dated April 16, 1972. Since, the transfer was without consideration, the Gift-tax Officer treated it to be a gift under Section 4 of the Gift-tax Act, 1958 (hereinafter referred to as "the Act" ). The assessee pleaded before the Gift-tax Officer that the transfer relates to an ancestral land and that as no valid gift can be made of the ancestral property by a father to his son, the gift being void and there being no gift within the meaning of the Act, the same could not be subjected to gift-tax. The Gift-tax Officer did not accept this plea and took the view that the assessee is a Jat Sikh by caste and is absolute owner of the agricultural land and, therefore, he had a right to make a gift of his property to his sons. Treating the gift to be valid, the Gift-tax Officer levied the tax.