IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 9TH SEPTEMBER 2009 / 18TH BHADRA 1931 GTA.No. 5 of 2009() ------------------- GTA.6(COCH)/2002 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT --------------------------------------- THE COMMISSIONER OF GIFT TAX, KOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- SHRI.P.J.KURIAN, PALAKUNNEL HOUSE, ATHIRAMPUZHA, KOTTAYAM. THIS GIFT TAX APPEAL HAVING COME UP FOR ADMISSION ON 09/09/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. .................................................................... G.T. Appeal No.5 of 2009 .................................................................... Dated this the 9th day of September, 2009. JUDGMENT Ramachandran Nair, J. Heard Senior Standing Counsel appearing for the appellant. The question raised is whether the respondent-assessee is liable to pay gift tax in respect of the landed properties transferred by him through gift deeds to his 18 year old daughter, which gifts were later cancelled through cancellation deeds executed by him within 3 to 4 years of the original gift. The first appellate authority cancelled the gift tax assessments holding that the gift was not accepted by the donee and was cancelled before the donee took possession of the properties by way of acceptance of gift. The Tribunal by majority orders confirmed the order of the first appellate authority, against which this appeal is filed. 2. Senior Standing Counsel has relied on decision of the Supreme Court in K.BALAKRISHNAN V. K.KAMALAM & ORS. (2004) 186 CTR 209 and contended that since the gift is by father to daughter, 2 there is a presumption of it's acceptance and so much so, the orders of the first appellate authority and the Tribunal are not tenable. However, we find from the Tribunal's order that they have relied on two reported judgments of this court and judgments of other High Courts and the Supreme Court and held that acceptance of the gift is mandatory for the purpose of assessment of the gift under the Gift Tax Act. On facts the Tribunal held that the gift is not accepted by the donee who was only 18 years of age at the time the gift deeds were executed in her favour by her father. Even though counsel has relied on the mutation effected in Revenue records, it is the finding of the appellate authorities that actually gift was not accepted by the donee in as much as she has not even taken possession of the properties, much less enjoyed the benefits therefrom. The assessed value of the gifted property is Rs.12,71,700/- and the gift tax and interest demanded thereon is Rs.9,22,502/-. The appellant does not dispute the cancellation deeds executed by the donor in the Registry, with the result the gift deeds executed remained cancelled as on date of assessment. It is a settled position that for assessment under the Gift Tax Act, the gift should be 3 accepted by the donee. Since the final fact finding authority namely, the Tribunal, confirmed on facts that there is no acceptance of gift by the donee, we do not find any substantial question of law arising from the order of the Tribunal. Consequently the appeal filed by the Revenue is dismissed. C.N.RAMACHANDRAN NAIR Judge V.K.MOHANAN Judge pms