Commissioner Of Gift Tax vs Shri.C.R.S.Pillai on 19 January, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

GTA.No. 13 of 2008()



1. COMMISSIONER OF GIFT TAX,TRIVANDRUM
                      ...  Petitioner

                        Vs

1. SHRI.C.R.S.PILLAI,T.C.9/269,TRIVANDRUM
                       ...       Respondent

                For Petitioner  :SRI.JOSE JOSEPH, SC, FOR INCOME TAX

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice C.K.ABDUL REHIM

 Dated :19/01/2009

 O R D E R
                    C.N.RAMACHANDRAN NAIR &
                            C.K.ABDUL REHIM, JJ.
               ....................................................................
                          G.T. Appeal No.13 of 2008
               ....................................................................
               Dated this the 19th day of January, 2009.

                                      JUDGMENT

Ramachandran Nair, J.

The question raised in the Gift Tax Appeal filed by the Revenue

is whether the Tribunal was justified in confirming the order of the first

appellate authority cancelling the gift tax assessment made on the

respondent-assessee under Section 4(1)(a) of the Gift Tax Act. The

assessee sold land and building to a company for Rs.20 lakhs. The

Assessing Officer noticed that the book value is more than the sale

price and so much so, he brought the difference to tax by applying the

Wealth Tax Rules on valuation namely, Rule 14(2)(b) of the Wealth

Tax Rules. The first appellate authority noticed that the property was

not referred for valuation and therefore, Wealth Tax Rule relied on by

the Assessing Officer has no application. We find that market value is

adopted from the value declared by the assessee in the application filed

under Section 230(A) of the Income Tax Act which was a depreciated

value shown in the books of accounts. Since the property was not

2

referred for valuation, first appellate authority rightly held that Rule

has no application. It is this order which is confirmed by the Tribunal

through a brief order. Sale appears to have been made by the assessee

to a company in his control which is nothing but bringing the business

under a corporate entity. It is to be noted that the assessee’s conduct

led to less depreciation benefit for the purchaser which is a company

under his control. We, therefore, do not find any ground to interfere

with the order of the Tribunal as no substantial question of law arises

from the order of the Tribunal. We, therefore, dismiss the appeal.

C.N.RAMACHANDRAN NAIR
Judge

C.K.ABDUL REHIM
Judge
pms