Quashing the gift-tax assessment: Transfer of shares

Court :
Supreme Court

Brief :
The facts: The assessee, being the owner of 6000 fully paid up equity shares executed a deed of revocable transfer in favour of M/s Yogesh Chandra and Brothers Associates Under the deed, the assessee could, on completion of 74 months from the date of transfer but before the expiry of 82 months from the said date, exercise the power of revoking the gift.- The deed of revocable transfer specifically stated that the gift shall not include any bonus shares or right shares coming to the transferee from(the company),therefore, only a gift of 6000 equity shares was made by the assessee to the transferee.- The company issued bonus shares and since the transferee was a holder of the gifted equity shares, 4000 bonus shares of the said company were allotted tothe transferee. Another 10,000 bonus shares were allotted to the transferee by the company.Thereafter, during the window of eight months, the assessee revoked the gift with the result that the 6000 shares gifted to the transferee came back to the assessee. - Gift Tax Officer passed an assessment order and held that the revocable transaction entered into by the assessee was only for the purpose of reducing the tax liability. - Assessee preferred an appeal before the Commissioner of Gift Tax but found no success.- assessee then preferred a further appeal to the Tribunal - it was held that if the assessee “does not exercise an option to revoke the gift within the provided for period of 82 months, then at that point of time also, there will be a further valuation of the residuary interest….”. - Tribunal, the Revenue took up the matter in appeal before the Punjab & Haryana High Court. - Appeal dismissed - contn....

Citation :
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3914 OF 2010 Satya Nand Munjal …..Appellant Versus Commissioner of Gift Tax …..Respondent WITH CIVIL APPEAL NO. 3915 OF 2010