Law:

Section:

Section 2(xxiv) of the Gift-tax Act, 1958 - Transfer of property - Assessee, a beneficiary of original trust, in exercise of power of appointment given to her by trustees, released life interest in part of corpus of trust fund in favour of trusts settled by assessee, which were not beneficiaries in original trust deed - Whether such transfer amounted to transfer of property within meaning of section 2(xxiv)(c) - Held, yes - Whether there was no justification for levying gift-tax on value of entire corpus since it was actually assessee's interest in property, which was transferred - Held, yes FACTS The assessee was one of the beneficiaries of the original trust deed settled on 30-3-1960. On 24-1-1976, a resolution was passed by the trustees whereby the assessee was conferred with power of appointment and transfer of life interest in slice 'A' of the corpus of the fund without any limitation in favour of any other person. The assessee transferred life interest in favour of four trusts settled by the assessee. The four trusts were not beneficiaries of the original trust deed. The Tribunal found that it was a transfer of property under section 2(xxiv)(c) in the relevant assessment year and only the interest of the assessee transferred was liable to tax. On reference : HELD The Tribunal was right in holding that the provisions of section 2(xxiv), even prior to its amendment, referred to the exercise of powers of appointment and the words 'in favour of any person other than donee of the power' qualify words 'exercise of power' and not words 'power of appointment' to determine its disposition. From the deed dated 30-3-1960, as well as power of appointment as granted in resolution dated 24-1-1976, it was clear that the donee was vested with the power of transfer slice 'A' funds of the trust without any limitation of her power and the power was capable of being exercised in favour of the assessee herself also. In that view of the matter, the requirement of section 2(xxiv) that the exercise of power of appointment to determine its disposition in favour of any person other than the donee of the power very much covered the transaction in question by which the assessee…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492