The Commissioner Of Gift Tax vs M. Peermoohammed on 19 January, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

GTA.No. 12 of 2008()


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

                        Vs



1. M. PEERMOOHAMMED,
                       ...       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.12 of 2008
                ....................................................................
                Dated this the 19th day of January, 2009.

                                       JUDGMENT

Ramachandran Nair, J.

The Gift Tax Appeal is filed by the Revenue against the order of

the Tribunal confirming first appellate authority’s order cancelling gift

tax assessment made under Section 4(1)(c) of the Gift Tax Act. We

have heard Standing Counsel appearing for the appellant and have gone

through the impugned orders.

2. The gift involved in this case is value of half share of property

purchased in the joint names of the respondent and his wife. The

Assessing Officer noticed that respondent’s wife did not make any

payment for the half share of property acquired and since the

consideration was fully paid by respondent, it is a deemed gift under

Section 4(1)(c) of the Gift Tax Act. Even though in principle we agree

with the Standing Counsel that Section 4(1)(c) is attracted, it is seen

that on facts, respondent proved before the appellate authorities that the

respondent’s source of fund was through borrowals and two years after

2

the assessment Rs.5 lakhs was repaid by his wife through Account

Payee Cheque. No investigation is seen made about the source of fund

of respondent’s wife to repay the loan. In view of the finding on facts

by the first appellate authority and the Tribunal that the source of fund

for acquisition was borrowal and respondent’s wife repaid the loan to

him, it was a case of proved loan arrangement between respondent and

his wife. We do not find any substantial question of law arising from

the order of the Tribunal and consequently we dismiss the appeal.

C.N.RAMACHANDRAN NAIR
Judge

C.K.ABDUL REHIM
Judge
pms