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Section 4 of the Gift-tax Act, 1958 - Deemed gift -Assessment year - 1968-69 - Assessee wrote off certain amount due from his brother - Then, for income-tax purposes, he claimed amount as bad debt - Revenue authorities however, rejected assessee's claim - GTO, thereupon, assessed amount written off as gift under section 4(c) - Tribunal, however, set aside GTO's order - On instant reference, it was seen that writing off debt was only an attempt made by assessee, to make it appear that debt was a bad debt but in fact there was no absolute and resolute intention of abandoning amount in question - Whether in view of aforesaid facts, Tribunal was justified in holding that amount written off did not amount to gift liable to be assessed under section 4(c) - Held, yes FACTS Certain amount was due to the assessee as on the 1-4-1967, from his brother. On the 13-3-1968, the assessee sent a lawyer's notice demanding this amount. The brother promptly replied totally denying liability. Without any protest the assessee accepted that position and wrote off the debt on 31-3-1968, in his account. Then for income-tax purposes he claimed the amount as a bad debt. He was no doubt worsted. He did not appeal from the decision of the ITO. The GTO, assessed the amount written off as gift under section 4(c). The Tribunal, however, allowed the assessee's appeal. On reference: HELD If one turns to the legal meaning of the term 'abandonment' two requirements are insisted upon. An intention to abandon and an overt act or failure to act which carried the implication that the owner neither claims nor retains any interest. The abandonment must of course be giving up of a thing absolutely without reference to any particular person or purpose. The intention to abandon must be evident. In the instant case, the ITO had issued notice to the brother and in his reply the brother admitted that he owed the amount. This was opposed to what he said in his reply to the lawyer's notice at the instance of the assessee. It appeared to be evident that the writing off was a pretence for a particular purpose. That purpose failed. Clearly, therefore, there was no absolute and resolute intention to give up. This…

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