JUDGMENT
Govindan Nair, J.
1. The question referred to us by the Income-tax Appellate Tribunal, Cochin Bench, under Section 26(1) of the Gift-tax Act, 1958 (hereinafter called “the Act”), is in these terms :
“Whether, on the facts and in the circumstances of the case, the
Appellate Tribunal was right in holding that Section 5(3) of the Gift-tax
Act, 1958, applied to the gift under consideration and that the gift was
liable to tax under the Gift-tax Act, 1958 ?”
2. The gift in question was by a deed dated April 7, 1964, executed by the wife in favour of the husband. Earlier, she had obtained this property from her husband by a deed of gift dated April 26, 1957, This gift dated April 26, 1957, was exempted from tax under Section 5(1)(viii) of the Act. Section 5(1)(viii) at the time of the later gift ran thus :
“5. (1) Gift-tax shall not be charged under this Act in respect of gifts made by any person–..
(viii) to his or her spouse, subject to a maximum of rupees fifty thousand in value in the aggregate in one or more previous years, the expression ‘spouse’ in this clause, where there are more wives than one, ‘ meaning all the wives together : ”
3. Sub-section (3) of Section 5 without its Explanation, which it is admitted is not relevant, was in these terms :
“Notwithstanding anything contained in Sub-section (1) or Sub-section (2), where either spouse makes any gifts out of any such gifts received by that spouse as fall within Clause (viii) of Sub-section (1), the gifts so made shall be deemed to be taxable gifts made by that spouse and nothing contained in Sub-section (1) or Sub-section (2) shall apply in relation to any such gifts.”
4. Sub-section (2) of Section 5 may also be read :
“Without prejudice to the provisions contained in Sub-section (I), gift-tax shall not be charged under this Act in respect of gifts made by any person during the previous year, subject to a maximum of rupees five thousand in value.”
5. Counsel on behalf of the assessee has contended before us that the scheme of the Act postulates a year as the unit of assessment. This being so, it is further urged that the expression “gifts received by that spouse as fall within Clause (viii) of Sub-section (1)” must be related to gifts received during the relevant previous year with reference to which tax is sought to be, imposed under the Act. In effect what is contended for is the words “in the previous year” must be added to the expression that we have quoted above. This, we consider, would not be justified, for, if we do so, in the guise of interpreting the Section, we will be amending it. Counsel also emphasised the expression “as fall within Clause (viii)” and it was contended that “as fall within Clause (viii)” indicates something that had accrued in praesenti and not in the past as in that case the expression would have been “as fell within Clause (viii)”. We do not see much force in this contention because even if the original gift by the husband to the wife was in the previous year, the word could be “fell” because with reference to the time of the latter gift the earlier one is anterior. “As fall within Clause (viii)”, therefore only means the gift to which Clause (viii) was applicable.
6. Reference was made to a Division Bench ruling of this court in Abdulsalam Rowther v. State of Kevala, [1960] K.L.J. 1505 (Ker.). This decision is authority for the proposition that whether a dealer is the last purchaser must be determined with reference to the year relating to which he was taxed; It was submitted that this authority would lend support to the contention that in taxing statutes whether it be sales tax enactments or income-tax or gift-tax statutes, the unit of assessment will always be a definite period, most often confined to an year, and that everything said in the statute relating to such matters of taxation must be taken as referring to that period. When there is ambiguity and the wording is not clear, it may perhaps be possible to interpret the ambiguous provision by applying such notions. But, when there is no ambiguity in the wording of the statute, its words cannot be changed by referring to such notions as the period for which assessments
have to be made. Also, the Act, as is evident from the provision in Section 5(1)(viii), takes in not only gifts that had taken place during any particular period of one year but for longer periods of several years.
7. On a reading of Sub-section (3) of Section 5 of the Act, the questions that have to be answered are : (1) was there a gift by a spouse ? and (2) was that gift by the spouse out of any gifts received by that spouse as fall within Clause (viii) ? If these two questions are answered in the affirmative Sub-section (3) is attracted notwithstanding the provisions in Sub-section (1) or (2). So for the gift in question, the one dated April 7, 1964, exemption under Clause (viii) of Sub-section (1) of Section 5 is not available. If it is not available, tax will have to be paid.
8. We, accordingly, answer the question referred to us in the affirmative, that is, against the assessee and in favour of the department. We direct the parties to bear their respective costs.
9. A copy of the judgment under the seal of this court and the signature of the Registrar will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench, as required by Sub-section (6) of Section 26 of the Act.
