Court In K.balakrishnan v. K.kamalam & Ors. (2004) 186

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 9TH SEPTEMBER 2009 / 18TH BHADRA 1931 GTA.No. 5 of 2009() ------------------- GTA.6(COCH)/2002 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT --------------------------------------- THE COMMISSIONER OF GIFT TAX, KOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- SHRI.P.J.KURIAN, PALAKUNNEL HOUSE, ATHIRAMPUZHA, KOTTAYAM. THIS GIFT TAX APPEAL HAVING COME UP FOR ADMISSION ON 09/09/2009,THE COURT ON THE SAME DAY DELIVEREDTHE FOLLOWING: ON 09/09/2009,THE COURT ON THE SAME DAY DELIVERED C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. .................................................................... G.T. Appeal No.5 of 2009 ....................................................................Dated this the 9th day of September, 2009. JUDGMENT Ramachandran Nair, J. Heard Senior Standing Counsel appearing for the appellant. Thequestion raised is whether the respondent-assessee is liable to pay gifttax in respect of the landed properties transferred by him through giftdeeds to his 18 year old daughter, which gifts were later cancelledthrough cancellation deeds executed by him within 3 to 4 years of the original gift. The first appellate authority cancelled the gift taxassessments holding that the gift was not accepted by the donee andwas cancelled before the donee took possession of the properties byway of acceptance of gift. The Tribunal by majority orders confirmedthe order of the first appellate authority, against which this appeal isfiled. 2. Senior Standing Counsel has relied on decision of the Supreme Court in K.BALAKRISHNAN V. K.KAMALAM & ORS. (2004) 186 CTR 209 and contended that since the gift is by father to daughter, there is a presumption of it's acceptance and so much so, the orders ofthe first appellate authority and the Tribunal are not tenable. However,we find from the Tribunal's order that they have relied on two reportedjudgments of this court and judgments of other High Courts and theSupreme Court and held that acceptance of the gift is mandatory for thepurpose of assessment of the gift under the Gift Tax Act. On facts theTribunal held that the gift is not accepted by the donee who was only18 years of age at the time the gift deeds were executed in her favourby her father. Even though counsel has relied on the mutationeffected in Revenue records, it is the finding of the appellate authoritiesthat actually gift was not accepted by the donee in as much as she hasnot even taken possession of the properties, much less enjoyed thebenefits therefrom. The assessed value of the gifted property isRs.12,71,700/- and the gift tax and interest demanded thereon isRs.9,22,502/-. The appellant does not dispute the cancellation deedsexecuted by the donor in the Registry, with the result the gift deedsexecuted remained cancelled as on date of assessment. It is a settledposition that for assessment under the Gift Tax Act, the gift should be accepted by the donee. Since the final fact finding authority namely,the Tribunal, confirmed on facts that there is no acceptance of gift bythe donee, we do not find any substantial question of law arising fromthe order of the Tribunal. Consequently the appeal filed by theRevenue is dismissed. C.N.RAMACHANDRAN NAIRJudge pms V.K.MOHANANJudge