Punjab-Haryana High Court
Amarinder Singh vs Gift Tax Officer Patiala on 7 November, 2024
Author: Sanjeev Prakash Sharma
Bench: Sanjeev Prakash Sharma
Neutral Citation No:=2024:PHHC:145095-DB
203
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
GTA
GTA-6-2010 (O&M)
Date of Decision:
Decision:07.11.2024
MAHARAJA AMARINDER SINGH L/H LATE MAHARAJA YADVINDRA
SINGH, PATIALA
........Appellant(s)
(s)
V/s.
THE GIFT TAX OFFICER, DISTRICT 1(1), PATIALA
.........Respondent(s))
CORAM: HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
HON'BLE MR. JUSTICE SANJAY VASHISTH
Present Mr.Akshay Bhan, Senior Advocate
Mr. Advocate, assisted by
Mr. Shantanu Bansal, Advocate for the appellant.
Mr. Saurabh Kapoor, Senior Standing Counsel, with
Ms. Muskaan Gupta, Advocate
for the respondent-Income
respondent Income Tax Department.
*****
****
SANJEEV PRAKASH SHARMA, J. (Oral)
1. This appeal has been preferred by the Assessee against the order
dated 20.08.2009 (Annexure P-6)
P passed by the Income Tax Appellate
Tribunal (herein after referred to as "ITAT"), whereby the ITAT decided the
question as framed by the Hon'ble Supreme Court against the appellant--
Assessee.
2. After first round of litigation, when it reached to the Supreme
Court and yet order has been passed in favour of the appellant
appellant-Assessee,
Assessee, the
Supreme Court directed as under:-
under:
"Exemption was claimed, as stated above, under Se
Sectioin
5(1) (xvi) in respect of the aforestated two distinct and separate
items. On going through the pleadings, we find that the findings
have been recorded at the cost of clarity. There is utter
confusion regarding the nature of the gift, the effect of tthe Hindu
Succession Act, 1956, as we as well as the scope of the Gift Tax
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GTA-6-2010 (O&M)
Act, 1958. In the circumstances, we have no option but to remit
the matters to the Tribunal for fresh consideration in accordance
with law on the following two issues:
issues:-
ift amount of `10,00,000/- was made out
(a) Whether the gift
of Privy Purse.?"
It is true that a finding of fact has been recorded by the
authorities below that the gift has bee
been made out of the Privy
Purse. However, in these cases for the reasons mentioned above,
we want the tribunal to bifurcate the two issues and given
separate independent findings
findi gs on each of the issues and,
consequently, we direct the Tribunal to de novo examine this
consequently,
point on its own merits uninfluenced by the observations of the
High Court in the impugned judgment and its own observations
in the earlier order.
(b) Whether the transfer of agricultural lands
admeasuring 425 bhigas of the value of `3,82,500/-
was at all exigible to tax under the Gift Tax Act, 1958,
particularly after the enactment of the Hindu
Succession Act, 1956?"
3. While deciding the question No.(a) as above, the ITAT has
noticed that the Commissioner of Gift Tax has held that the cash gifts were
made out of Privy Purse and the cheques were also issued from the Privy
Purse.. However, it proceeded to pass the following order:
order:-
"17.0 In this background, we have carefully examined
contentions raised by the assessee before the Commissioner of
Gift tax(A) and find that the cash gifts were claimed to have
Gift-tax(A)
been from the bank account
account No.956 in the State Bank of India,
Patiala wherein deposits were made from the receipts of the
Privy Purse against various cheques were issued in favour of the
donee trusts. As per the detail of the gifts noted by the
Commissioner of Gift-tax
Gift tax (A) and re
reproduced by us in para 4.2
of our order, it is note-worthy
note worthy that the gifts have been advanced
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GTA-6-2010 (O&M)
by way of cheques and also by way of cash. The source of cash is
stated to be out of the cash shown in the wealth
wealth-tax returns
whereas the source of cheques is stat
stated to be the amounts of
Privy Purse deposited in the relevant bank account. Both the
material, namely the relevant wealthy
wealthy-tax returns or the bank
account in question have not been brought on record so as to
enable us to give a finding in this regard. Apar
Apart therefrom, there
is no other material on record which would enable us to arrive
at an independent finding as to whether the cash gift of Rs.10
lacs has been xxx out of Privy Purse. Undoubtedly, the onus in
this regard is soon the assessee because it is tthe assessee who
has set up a claim that cash gifts are out of Privy Purse and they
are exempt in view of section 5(1)(xvi) of the Act provides for
exemption of gifts made out of Privy Purse where the same have
been made to relatives, dependant for maintena
maintenance and support.
Therefore, in the absence of the relevant material before us, it is
neither possible to test the finding recorded by the
Commissioner of Gift-tax(A)
Gift tax(A) and nor rector and independent
finding that the cash gifts are given out of Privy Purse am
amounts.
The aforesaid is important because the finding of the Assessing
Officer is against the assessee and even the Commissioner of
Gift tax (A) has not referred to any clinching material or basis
Gift-tax
to justify his finding. Therefore, the claim of exemption uu/s
5(1)(xvi) of the Act cannot be further examined. An alternative
claim of the assessee was that the Privy Purse amounts
constituted joint family property of the Hindu Undivided Family
and, therefore, any gift out of the same to the donees in question
does not attract liability under the Gift Tax Act, 1958. This claim
does
of the assessee also cannot be examined unless it is found that
the cash gifts are out of the Privy Purse amounts.
18.0 We have given our anxious thoughts to this issue,
keeping in mind the directions of the Hon'ble Supreme Court.
Whether or not the cash gifts have come out of the Privy Purse is
crucial to decide the applicability of section 5(1)(xvi) of the Act
and also the
the alternative claim of the assessee for exemption from
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the levy of gift-tax.
gift tax. Ostensibly, in order to test both the aforesaid
claims of the assessee, it is a primary condition that the source
of cash gift ought to be the Privy Purse and this aspect cannot be
established on the basis of material and evidence on record.
Therefore, the claim for exemption under section 5(1)(xvi) has to
be fail, having regard to non-fulfillment
non fulfillment of the primary condition
referred above. Consequently, we also refrain from adjustin
adjusting on
the alternative claim, having regard to non
non-fulfillment of the
primary condition regard to non
non-fulfillment of the primary
condition referred above."
4. Learned Senior counsel appearing for the appellant
appellant-Assessee
Assessee
submits that once there was a finding of fact already arrived at by the
Commissioner
ommissioner Gift Tax, which has not been held to be perverse, there was no
occasion for the appellant-Assessee
appellant Assessee to be asked independently to again
provide the proof other than
tha what was on record before the Commissioner
Gift Tax in support of his submission that the gift amount of `10,00,000/--
were made out of the Privy Purse.. He further submits that the ITAT was not
only
ly required essentially to give findings relating to gift amount to be made
as Privy Purse, but was also required
red to look into effect of the provisions of
the Hindu Succession Act, 1956 having come into force and whether the said
amount would be treated as HUF.
5. Learned counsel for the respondent submits that once the case
was remanded to the ITAT, it was the duty of the Assessee to again produce
the record before the ITAT independently what was produced before the
Commissioner Gift Tax and the same was required to be adjudicated
independently. Since the appellant-Assessee
appellant Assessee did not produce the proof
relating to the source of cash
cas and cheques having come from Privy Purse,, the
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ITAT cannot be said to be committed any illegality in not treating the same to
be from the Privy Purse.
Purse
6. We have considered the submissions of the learned counsel for
both the parties and carefully
carefully gone through the orders passed as noticed
above.
7. The Supreme Court had itself given a finding that the question
whether the gift amount of `10,00,000/- was made out of the Privy Purse,
was a finding of fact required to be given by the ITAT. Since the ITAT was
already seized of the entire record and the Commissioner of Gift Tax has, in
its findings in Para 8, noticed various cheques and cash being made from the
Privy Purse amount on various dates, the ITAT could not have further asked
the appellant--Assessee
essee to produce other than what was already available
before Commissioner of Gift Tax.
Tax
8. It would be apposite to quote Para 8 of the order dated
31.03.1979 passed by the Commissioner of Gift Tax
Tax:-
"8. That leaves the question of the cash gifts of Rs 10 Lacs. In
"8.
the regard the main objection of the GTO was that appellant has
not been able to give any evidence to show that these cash gifts
were given out of the Privy Purse. But the contention of the A.R.
was that as per the details available with them for these cash
gifts it is quite clear that these were made out the amounts
available with the appellant either in cash as show in the
Wealth
Wealth-tax returns or in the Bank Account No. 956 in the State
Bank of India, Patiala, wherein the deposits were made from th
the
receipts of the Privy Purse against which the various cheques
were issued in favour of the two trusts in question. Hence after
going through the details furnished by the A.R. these does not
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remain any doubt about the fact that the gifts were made out of
the Privy Purse amounts as under: -
I. Maharani Mohinder Kaur Trust
5.11.1971 By Cheque Rs.25,000/
Rs.25,000/-
18.12.1971 By Cash Rs.3,45,000/
Rs.3,45,000/-
18.12.1971 By Cash Rs. 2,30,000/
2,30,000/-
Rs.6,00,000/
Rs.6,00,000/-
II. Yuvraj Amrinder Singh Trust
05.11.1971 By Cheque Rs.25,000/
Rs.25,000/-
5.11.71 By Cash Rs.55,000/
Rs.55,000/-
8.11.1971 By Cheque. Rs.50,000/
Rs.50,000/-
10.04.1971 By Cheque Rs.70,000/
Rs.70,000/-
10.04.1971 By Cheque Rs. 65,000/
65,000/-
5.08.1971 By Cheque Rs. 1,35,000/
1,35,000/-
Total Rs. 4,00,000/
4,00,000/-
9. Thus, from the above, it is apparent that the statement of account
of the Privy Purse of a particular Bank Account No.
No.956
956 of State Bank of
India, Patiala was available before the concerned Commissioner Gift Tax and
it clearly reflected that from the account relating to Mohinder Kaur Trust
Privy Purse, cheques and cash were released in favour of the said Trust
amounting to `6,00,000/- and to Amarinder Singh Trust of `4,00,000/- in all
on various dates which would furtherr require adjudication
adjudication.
10. We, therefore, find that the order passed by the ITAT hinges on
perversity and does not take into account the record which was available with
them as the case had been travelled from the Commissioner Gift Tax
Tax. The
he
answer to question
questio No.(a) is, therefore, accordingly found to be in favour of
the appellant--Assessee and it is held that the gift amount of `10,00,000/- was
made out of Privy Purse. Consequences thereof shall follow.
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11. In view of the aforesaid observations, the present Appeal stands
disposed of.
12. All pending applications also stand disposed of accordingly.
[SANJEEV
SANJEEV PRAKASH SHARMA
SHARMA]
JUDGE
[SANJAY
SANJAY VASHISTH
VASHISTH]
November 7,, 2024 JUDGE
Ess Kay
Whether speaking / reasoned : Yes / No
Whether Reportable : Yes / No
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