Ajit K.Sengupta, J. - (1.) In this reference under Section 26(1) of the Gift-tax Act, 1958, for the assessment year 1973-74, the following questions have been referred to this court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that by his order dated May 22, 1980, the Appellate Assistant Commissioner determined the value of the gifted property at Rs. 5,45,700 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the valuation made by the Gift-tax Officer by capitalising the income by the multiplier 13,414?"
(2.) Shortly stated, the facts are that the assessee bequeathed his one-sixth share in certain leasehold land and structures thereon subject to the mortgage in favour of the United Bank of India to Smt. Shradha Poddar, a minor. This gift was made under a deed of gift dated June 26, 1972. The assessee filed a return declaring the value of the gift at Rs. 8,549 only. The Gift-tax Officer, however, determined the value of the gift at Rs. 1,75,000 by his order dated March 28, 1979. The assessee appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner was of the view that the assessment required enhancement and accordingly, he issued a notice to the assessee intimating, inter alia, that the value of the leasehold interest in the above property as on the date of gift would work out to Rs. 5,45,700, which will be the value of the taxable gift for the assessment year in question, i.e., 1973-74, as against the value of the taxable gift of Rs. 1,75,000, determined by the Gift-tax Officer. The assessee replied to the proposed enhancement contending that it was much too excessive. The Appellate Assistant Commissioner dealt with the contentions of the assessee and he came to the finding that the yield rate of 5.5 per cent. was justified in the facts and circumstances of this case and he has given elaborate reasons therefor.
(3.) At the time of hearing before the Appellate Assistant Commissioner a contention was raised that the gifted property consisted of two leasehold properties and the unexpired period of lease varied in the two cases. The Appellate Assistant Commissioner dealt with this contention in the manner following : "At the time of hearing, it was stated that the property gifted were two leasehold properties, (i) the first one was for thirty years beginning from January 2, 1958. As on the date of gift, the unexpired period was for fifteen years, (ii) the second property was for a lease of thirty-five years from June 26, 1963, and the unexpired period of the lease as on the date of gift was twenty-four years. The assessee's representative was unable to give the amount of rent attributable to each of the properties separately. The value of each of the properties as on the date of the gift has to be determined, keeping in view (i) the net income of the property, and (ii) the unexpired period of the lease. As the net income attributable to each leased property has not been furnished by the assessee's representative, I have to set aside the assessment to enable the Gift-tax Officer with a direction to determine the net income of the two leased properties and to determine the value of the assessee's leasehold interest keeping in view the unexpired period of lease. It is found that the unexpired period of lease has been taken at twenty-four years by the Gift-tax Officer whereas as per the assessee's contention it is fifteen years in respect of one property and twenty-four years in respect of the other property.";