Law:

Section:

Section 5, read with section 26 of the Gift-tax Act, 1958 - Exemption - Gift for education of children - Assessee gifted half portion of a house to his son for providing education and claimed exemption - GTO assessed it to gift-tax on valuation agreed by assessee - AAC granted exemption under section 5(1)(xii) - Tribunal held that since assessment made by GTO was agreed assessment it was not open to appeal to AAC - Whether since GTO's order did not expressly state that assessee had withdrawn his claim for exemption, question as to whether Tribunal was justified in holding that assessee had given up his claim for exemption under section 5(1)(xii) before GTO, was a referable question of law arising out of Tribunal's order - Held, yes FACTS The assessee made a gift in favour of his son of half portion of a house. The purpose of the gift was for providing education to the donee. Before the GTO, the assessee claimed exemption under section 5(1)(xii). The GTO assessed the gift to gift-tax. On appeal, the AAC granted exemption. In further appeal to the Tribunal the order of the AAC was set aside and the order passed by the GTO was restored on the ground that the assessment made by the GTO was agreed assessment and was not open to appeal to the AAC. Assessee's application for reference was rejected by the Tribunal. On application under section 26(2) : HELD The order of the GTO did not expressly state that the assessee withdrew his claim for exemption under section 5(1)(xii). All that was stated in express terms therein was that the assessee agreed to the valuation of the gift at Rs. 40,500. The Tribunal had also referred to a letter of the assessee which he wrote to the GTO. In that letter also there was no express statement by the assessee that in case the gift was valued at Rs. 40,500 he would not claim the exemption under section 5(1)(xii). Therefore, the question as to whether the Tribunal was justified in holding that the assessee had given up his claim for exemption under section 5(1)(xii), before the GTO, was a question of law arising out of Tribunal's order. The Tribunal was directed to state a case and refer the said question to the High Court. JUDGMENT This…

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