COMMISSIONER OF INCOME-TAX Vs. SATYA NAND MUNJAL

JUDGEMENT

(1.) THIS order will dispose of two income-tax cases Nos, 58 and 59 of 1994, in which common questions of law and fact arise. For the sake of convenience, the facts are being taken from I. T. C. No. 58 of 1994.

(2.) THE assessee is an individual. He through a gift deed gifted 6,000 equity shares of the face value of Rs. 25 each of Hero Cycles to Yogesh Chander and Brothers Associates, 4,000 shares by way of bonus came to be received by the donee and a sum of Rs. 25,000 was also received during the relevant assessment years as dividend income on these bonus shares. In proceedings under the Gift-tax Act, the Gift-tax Officer held that the gift was void. This finding was affirmed in appeal but in second appeal the Tribunal as per its order dated August 23, 1991 in G. T. A. No. 3 of 1988 reversed the finding and held that the gift was valid. By an order dated December 31, 1993, the Tribunal referred the question regarding the validity of the gift to this court for its opinion and the matter is pending in this court.

(3.) WE have heard counsel for the parties and perused the orders of the Appellate Tribunal. The question whether the sum of Rs. 25,000 should be assessed in the hands of the assessee depends on the answer to the question whether the gift made by the assessee was valid or not and since that question already stands referred to this court, it becomes necessary to dispose of both the questions together.