Gift Tax Act, 1958

The Supreme Court examined whether the statutory first‑charge provisions in the Bombay Sales Tax Act (s.38C) and the Kerala General Sales Tax Act (s.26B) conflicted with the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (ORT Act) and the Securitisation and Reconstruction of Financial Assets and En…

The Sree Narayana Chandrika Trust, a partner in Chandrika Enterprises, saw its profit share fall from 45% to 30% when the firm was reconstituted and a new partner, M.U. Indira, contributed Rs 25,000 for a 12% share. The Gift Tax Officer treated the 15% reduction as a gift and levied tax under the Gift Tax Act, 1958. Th…

Satya Nand Munjal transferred 6,000 equity shares to a transferee in February 1982 under a deed that allowed revocation within a specified window. The transferee received 14,000 bonus shares during the period the gift was effective, and Munjal revoked the gift in June 1988, retaining the original shares but not the bon…

The Supreme Court heard appeals by three assessee brothers (Satya Nand Munjal, Brij Mohan Lal Munjal and Om Prakash Munjal) challenging High Court judgments that held they were liable to pay interest under section 168 of the Gift Tax Act, 1958 on tax assessed for the 1989‑90 assessment year. The issues were whether int…

The Commissioner of Wealth Tax, Gujarat sought to assess Ellis Bridge Gymkhana, an unincorporated club, for wealth tax for assessment years 1970‑71 to 1977‑78, arguing that the club fell within the term “individual” in Section 3 of the Wealth Tax Act, 1957. The club contended that an association of persons is not an in…

The assessee, K.S.N. Bhatt, claimed deductions in his wealth‑tax returns for income‑tax, wealth‑tax and gift‑tax liabilities, arguing that these amounts were debts owed on the valuation dates for the assessment years 1964‑65 to 1967‑68. The Wealth Tax Officer allowed only part of the deductions; the Appellate Assistant…

The Supreme Court examined the constitutionality of the Special Bearer Bonds (Immunities and Exemptions) Ordinance, 1981 and the subsequent Act, which granted anonymity and tax exemptions to holders of special bearer bonds intended to canalise black money. The petitioners argued that the President lacked authority unde…

The respondent, a retiring partner of two firms, surrendered his partnership rights and received the value of his share in the firms' assets. The Gift Tax Officer treated this relinquishment as a transfer of property and levied gift tax. The assessee appealed, and the Appellate Assistant Commissioner, the Tribunal, and…

The Commissioner of Wealth Tax, Bihar appealed against the Patna High Court’s decision that Maharaja Kumar Kamal Singh’s right to receive compensation under the Bihar Land Reforms Act should be valued at nil because of arrears of agricultural income‑tax. The central issue was whether such tax arrears could be deducted …

Sri Jagatram Ahuja, a retiring partner of a firm, executed a release deed whereby he transferred his rights in the firm's assets to his brother for Rs. 3,00,000, although the market value of his share was higher. The Gift Tax Officer treated the excess as a gift and levied tax, a decision upheld by the Commissioner (Ap…

The case concerned gifts of immovable property made by a deceased individual to his wives in 1962, which were chargeable to gift‑tax. The assessee claimed that, under the proviso to section 4(1)(a) of the Wealth‑Tax Act, 1957, such gifts should be exempt from wealth‑tax assessment for all assessment years commencing af…

The appellant, a partnership firm, granted a five‑year licence to a private limited company, with either party able to terminate the licence by giving six months' written notice. The Gift Tax Officer treated the transfer of the business as a gift made for inadequate consideration and levied gift tax for AY 1970‑71. The…

The respondent attempted to gift out‑houses attached to a building to his wife by an unregistered declaration dated 10 October 1966. The Gift Tax Officer rejected the claim, holding that Section 123 of the Transfer of Property Act, which requires a registered instrument for a gift of immovable property, was not complie…

The assessee, a partner in M/s. Chhotalal Vedilal, reduced his share in the firm and admitted his two minor sons to the partnership benefits, thereby relinquishing 19% of the goodwill. The Gift Tax Officer treated this relinquishment as a taxable gift of goodwill. The Appellate Assistant Commissioner, the Tribunal, and…

The appellants were a partnership firm (Juggi Lal Kamlapat Bankers) and a partner who was also the Karta of a Hindu Undivided Family (HUF). The HUF was assessed to wealth tax, and the assessment included the HUF's interest in the partnership firm. The Wealth‑Tax Officer, believing the book values of the firm’s building…

Khoday Distilleries Ltd issued a rights issue; twenty of its twenty‑seven shareholders did not subscribe and the unissued shares were allotted to seven existing investment‑company shareholders. The company also issued fully paid bonus shares in a 1:23 ratio. The Assessing Officer treated both the rights‑issue allotment…

The Deputy Commissioner of Gift Tax appealed against the valuation of shares gifted by M/s BPL Limited to M/s Celestial Finance Ltd. The shares, although listed, were promoter quota shares subject to a lock‑in period, raising the question of whether they were "quoted" for valuation purposes. The Supreme Court held that…

The Commissioner of Gift Tax appealed against the Gujarat High Court’s order that upheld a valuation of 480 unquoted shares of an English private company using the break‑up method based on the 31 March 1963 balance sheet. The assessee had argued for an average break‑up value from the 1964 and 1965 balance sheets, while…

The Commissioner of Gift Tax appealed against a Kerala High Court order that allowed an exemption from gift tax on a transfer of movable assets made by a Muslim businessman who was seriously ill and died six weeks after executing a settlement deed. The issue was whether the transfer qualified as a "gift in contemplatio…

The appellant, K.P. Varghese, sold a house to his daughter‑in‑law and five children for the same price he had paid for it (Rs 16,500) and reported no capital gain for the 1966‑67 assessment year. The Income‑Tax Officer later issued a notice under section 148 and reassessed the assessee, fixing the fair market value at …

The appellant, S. Viji, received unquoted shares of a company as a gift on 28 March 1973 and the valuation of these shares for gift tax purposes was disputed. Both parties agreed that the break‑up method under Section 6(3) of the Gift Tax Act, 1958 should be applied, but differed on which balance sheet to use: the one …

Reva Investment Pvt Ltd transferred jewellery, valued at Rs 13,91,350, to its twelve wholly‑owned subsidiary companies in exchange for fully paid equity shares having a face value of Rs 5,69,400. The subsidiaries held no assets other than the jewellery, while the shares received represented the entire shareholding of t…