K.R. Dixit, Judicial Member - (1.) ALL these appeals involve the same questions arising out of substantially the same facts. They are, therefore, dealt with by this common order. The assessees are aggrieved by the imposition of gift-tax regarding exercise of a certain power of appointment. There are number of grounds but they are all arguments to show how wrong the Commissioner (Appeals) was in partially confirming the imposition of the tax.
(2.) We will first take up GT Appeal No. 51 (Ahd.) of 1983. Smt. Anarkali Sarabhai, whatever is stated regarding her case will apply to the other cases except minor factual details which are not material. That is how the matter was argued before us and that is how we will deal with it. The facts briefly are that in the year 1960 the assessee's mother, Bharatidevi, created a trust of certain properties, giving the trustees discretion to accumulate or distribute the income and corpus among the beneficiaries which included the assessee. On 24-1-1976, the trustees by a resolution gave a power of appointment in respect of a portion (Slice A) of the properties to the assessee that they would hold it with effect from 1-4-2001 or to the death of the last survivors of some other beneficiaries under the trust for such person including the assessee as she may appoint. By the same resolution, the trustees also reserved authority to direct that the power of appointment exercised by her shall come into force on a date earlier than 31-3-2001 and thereupon the interest of the assessee and another beneficiary in the income shall cease and the trustees shall act accordingly. On 31-3-1976 the assessee exercised the power of appointment irrevocably in favour of certain new trusts. On 1-12-1977 the trustees of the original Bharatidevi Trust resolved that the said power of appointment exercised by the assessee shall come into operation with effect from 1-12-1977 and the interest of the assessee and another beneficiary in the net income of the said portion of the property shall cease with effect from that date and that the trustees shall transfer the said portion of the properties to the new trusts as directed by the assessee in exercise of power of appointment. The GTO held that the exercise of power of appointment amounted to transfer of a property under the Gift-tax Act, 1958 ('the Act') and was, therefore, gift under that Act. He valued the gift at the fair market value of the entire corpus of the properties which were the subject-matter of the exercise of power of appointment.
(3.) THE Commissioner (Appeals) held the same view that the exercise of the powers amounted to gift but so far as the value of the gift was concerned, he held that only the interest of the assessee in the property can be said to have been gifted and that was to be valued and, therefore, restored the matter to the GTO to make a fresh assessment in accordance with law after evaluating the interest of the appointed trust as on 31-3-1976 and assess only the value of such interest in the assessment year in respect of each of this trust.;