- (1.) THE Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following question of law under Section 26 (1) of the G. T. Act, 1958 (hereinafter referred to as "the Act"), for the decision of this court : "whether, on the facts of this case, the Tribunal was right in law in holding that the gift in favour of the wife of the 'karta' of the assessee-Hindu undivided family attracted the provisions of Section 5 (1) (viii) of the Gift-tax Act ?"
(2.) THE assessee is a HUF. The year ending 31st March, 1970, was the previous year relevant to the assessment year 1970-71. The assessee furnished to the GTO the statutory return due under the Act. During the said previous year, the assessee-HUF sold out of the agricultural lands owned by it, certain lands totally measuring in area 62,296 sq. yards and out of the sale proceeds thereof, an amount of Rs. 1,05,000 was verbally gifted to Smt. Shavinder Kaur, the wife of the "karta" of the asseasee-family. The GTO by his order dated 14th December, 1971, completed the gift-tax assessment after repelling the assessee's claim that the said gift was to the extent of Rs. 50,000 exempt from gift-tax by virtue of the provisions of Section 5 (1) (viii) of the Act. On appeal, the AAC of Gift-tax by his order dated 16th March, 1972, confirmed the order of the GTO. He found that the gift in question had been made by Shri Harbhajan Singh in his capacity as "karta" of the family and not in his capacity as an "individual ".
(3.) ON second appeal, the Tribunal accepted the assessee-family's contention that the gift in question was to the extent of Rs. 50,000 exempt as aforesaid. In coming to the said conclusion, it relied on a case, Jana Veera Bhadrayya v. CGT [1966] 59 ITR 176 (AP), and also on a judgment of this court in CGT v. Hari Chand [1974] 95 ITR 308 (Punj ).;