P. Krishna, J. - (1.) The Income Tax Appellate Tribunal has referred the following question of law under Section 26 (2) of the Gift Tax Act, 1961 (hereinafter referred to as the Act) for opinion to this Court: "Whether on the facts and the circumstances of the case the Tribunal is justified in holding that a taxable gift was made by the assessee during the accounting period corresponding to the assessment year 1979-80."
(2.) Since the facts of the case of Smt. Ram Dulari Agrawal are identical to the facts of the case of Shri Brij Prasad Agrawal, (as stated by the Tribunal in the statement of case) we are noticing the relevant facts of the case of Smt. Ram Dulari Agrawal only. The assessee, the donor, is an individual. Her accounting period for the assessment year 1979-80 ended on 24.10.1978.
(3.) The assessee, Smt. Ram Dulari Agrawal by an oral declaration created a Trust on 8th of April, 1977 known as Bee Kay Family Trust for the benefit of M/s. Eskay Paper Industries Pvt. Limited. Smt. Ram Dulari, the settler, transferred the gold ornaments weighing 5,261 grams to the trustees to be held in trust in accordance with the provisions earlier declared by her. Shri Padam Chand Kanodia and Shri Brijendra Kumar Agrawal were appointed as Trustee. The assessee, while transferring the ornaments to the Trust, expressly reserved her absolute rights and power to forego the said trust completely at any time she chose in her absolute discretion and to retransfer the said ornaments or other assets into which they were converted back to her for her absolute benefits. In exercise of the aforesaid power the assessee on 2nd of April, 1978 relevant to the assessment year 1979-80 executed a memorandum whereby she expressly and irrevocably renounced, released, disclaimed, surrendered, relinquished the claimed into or upon the said right of revocation reserved by her under or by declaration made by her on 8th of April 1977. On these facts the Gift Tax Officer held that surrender of power of revocation factually resulted in transfer of ownership of gift and therefore directed the levy of a gift tax in terms of Section 2 (xii) read with Section 4 (i) (c) of the Gift Tax Act (hereinafter referred to as the Act). The said order has been confirmed by the authorities below including the Tribunal.;