Law:

Section:

Section 19, read with sections 3 and 13, of the Gift-tax Act, 1958 – Legal representatives – Assessment year 1960-61 - During relevant accounting year ‘K' under registered deed of gift, gifted certain lands, shares and cash to his six sons – Recitals in gift deed showed that property in question was treated by ‘K' as his own property and he gifted same to his sons as his own property and his sons also accepted that position – ‘K' died on 17-2-1961 – Notices under section 13(2) were issued to all sons who filed separate returns as legal representatives of ‘K' describing themselves as donees – GTO then valued properties and assessed gift-tax payable – Whether, on facts, assessment order passed against sons as legal representatives of ‘K' on basis of six separate returns filed was valid – Held, yes FACTS During the accounting year relevant to the assessment year 1960-61, the ‘K' had gifted certain land, shares and cash to his six sons. ‘K' died on 17-2-1961 and the GTO issued notices under section 13(2) to all the sons. All the six sons filed separate returns as legal representatives showing equal amounts of gifts received from their deceased father. The GTO then issued notice under section 15(4) and he valued the land, and shares. He included the value of land, shares and cash in the gift so made and assessed it for gift-tax. The AAC held, (i) that the family was governed by the Dayabhaga school of Hindu law which was the generally accepted legal position and that the gifted properties did not belong to the joint Hindu family, (ii) that all the gifts were made in the previous year relevant to the assessment year 1960-61, and (iii) that the valuation of the land as found by the GTO was reasonable. Having so held, the AAC dismissed the appeal and confirmed the assessment made by the GTO. On second appeal, the Tribunal held that the notices were properly issued and served on the sons of ‘K' as legal representatives; that the returns filed by the sons of ‘K' were valid returns and the Gift-tax Officer was justified in assessing the sons of ‘K' as his legal representatives. The Tribunal, after considering the extract of the deed of gift given in the order of the AAC…

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