NDLI: Commissioner of Income Tax, Kanpur Vs. Dr. R.s. Gupta

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Sections 4 27(1) and 29-Wealth tax-Gift
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Wealth Tax Act, 1957 (27 of 1957)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Sections 4, 27(1) and 29-Wealth tax-Gift-Assessee directing firm by a letter to debit his account of certain amounts and credit respective accounts of his sons and grandsons-Gifts made out of love and affection-Entries in account books-Whether constitute valid gift-Whether includible in net wealth of assessee-Absence of cash balance with the firm or overdraft facilities with the bank-Effect of. The Income Tax Officer included in the net wealth of the respondent-assessee for the assessement year 1957-58, two sums, viz., Rs. 1,50,000 and Rs.67,560/12/- which the assessee claimed to have gifted. It is stated that on January 1, 1957 the respondent-assessee, by a letter directed a company in which he maintained an account, to debit his account to the extent of Rs. 1,50,000 and credit in the names of his two sons and grandsons various sums, as he had decided to give away these amounts to them out of love and affection. The company carried out the instructions and relevant debit and credit entries were made in the respective accounts. On the same day, by two separate letters, the gifts were accepted by the sons and later on these amounts were withdrawn by the respective donees. In the case of second gift, oral instructions were given for transferring the amounts standing to his credit. The respondent-assessee having failed before the Income Tax Officer and the Appellate Assistant Commissioner, appealed to the Income Tax Appellate Tribunal and contended that the first company was carrying on the business of banking and hence the gifts in question were valid, and that the Income Tax Officer and the Appellate Assistant Commissioner had wrongly included these amounts in his net wealth and in the case of second gift, the assessee claimed that the amounts were gifted by him by transfer entries. The Tribunal found that there was no evidence that the first company was carrying on any banking business, and in the case of second gift, the sum was available with the company. It, therefore, held that the first company was not carrying on banking business, and in the second case, there was no valid gift. It, however, referred the matter to the High Court. The High Court held that the Tribunal was not right in holding that the assessee did not make valid gifts and in holding that the amounts were rightly included in the net wealth of the assessee.
Judge	Honble Mr. Justice Sabyasachi Mukherjee
Neutral Citation	1987 INSC 30
Petitioner	Commissioner Of Income Tax, Kanpur
Respondent	Dr. R.s. Gupta
SCR	[1987] 2 S.C.R. 121
Judgement Date	1987-02-03
Case Number	1713

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