IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON SATURDAY, THE 23RD MAY 2009 / 2ND JYAISHTA 1931 OP.No. 15314 of 2002(W) ----------------------------------- PETITIONER: ------------------- MRS.ELAMMA KURUVILLA, C/O. M/S.POULOSE & MATHEN (P) LTD., K.S.RAMAN NAIR ROAD, UDYOGAMANDAL, KOCHI-683 501. BY MR.JOSEPH MARKOSE, SENIOR ADVOCATE, ADV.THOMAS VELLAPPALLY. RESPONDENTS: ------------------------ 1. THE DEPUTY COMMISSIONER OF WEALTH TAX, KOLLAM. 2. THE COMMISSIONER OF WEALTH TAX, TRIVANDRUM. R1 & R2 BY MR. JOSE JOSEPH, S.C. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 23/05/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P. NO. 15314/2002-W: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE ASSESSMENT ORDER DT. 16/07/2001 FOR THE YEAR 1997-98. EXT.P.2: COPY OF THE ASSESSMENT ORDER DT. 16/07/2001 FOR THE YEAR 1998-99. EXT.P.3: COPY OF THE ASSESSMENT ORDER DT. 16/07/2001 FOR THE YEAR 1999-2000. EXT.P.4: COPY OF THE REVISION PETITION DTD. 20/08/2001 FILED BEFORE THE R.2. FOR 1997-98. EXT.P.5: COPY OF THE REVISION PETITION DTD. 20/08/2001 FILED BEFORE THE R.2. FOR 1998-99. EXT.P.6: COPY OF THE REVISION PETITION DTD. 20/08/2001 FILED BEFORE THE R.2. FOR 1999-2000. EXT.P.7: COPY OF THE ORDER DTD. 27/03/2002 OF THE R.2. EXT.P.8: COPY OF THE DEED OF SETTLEMENT NO.1303/1997. EXT.P.9: COPY OF THE GIFT TAX RETURN SUBMITTED BY THE PETITIONER FOR ASSESSMENT YEAR 1998-99. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.A. TO JUDGE. prv. P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ O.P. No. 15314 of 2002 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 23rd day of May, 2009 JUDGMENT The petitioner is aggrieved of Ext.P7 order passed by the second respondent, whereby the challenge raised against the assessment orders, seeking to assess the concerned property at Kodaikanal gifted to the petitioner at the hands of her husband, by virtue of stipulation under Section 4 (1) (a) (i) of Wealth Tax Act, has been declined. 2. The case of the petitioner is that Ext.P1 to P3 assessment orders were passed with reference to the assessment years of 1997 - 1998, 1998 - 1999, 1999 - 2000 by the first respondent, whereby the tax liability was fixed on the basis of the entries given by the petitioner. Admittedly, no exemption was claimed with respect to the year 1997 - 1998 and at that point of time, the petitioner was having only one building at Madras. Subsequently, during the year 1998 - 1999, the building at Kodaikanal was gifted to the petitioner by the husband, declaring the value of this property as Rs. 2,11,738/- . The petitioner claimed exemption stating that, she was residing in the said building and sought to have the benefit under Section 51 (vi), though the assessing authority found that the actual value of the building was to be reckoned as Rs.11,51,380/-, based on the entry given by the husband O.P. No. 15314 of 2002 : 2 : of the petitioner in the return filed by him with respect to the Gift Tax. The claim of the petitioner seeking for exemption under Section 51 (vi) was granted, being an admissible claim. The position as above continued with respect to the subsequent year of assessment year i.e. 1999 - 2000 as well. 3. The petitioner, on second thought, approached the second respondent by filing Exts.P5, P6 and P8 revision petitions under Section 25 of the Act with respect to the concerned years. After considering the matter in detail, the second respondent passed Ext.P7 order holding that no exemption was sought for with respect to the assessment year 1998 - 1999. But the claim put forth by the petitioner was that, instead of Kodaikanal property, exemption might be granted in respect of the Madras property; was accepted and necessary directions were issued and accordingly, the Revision Petition for the assessment year 1997 - 1998 was allowed to the said extent. With regard to the case in respect of the assessment years 1998 - 1999 and 1999 - 2000, interference was declined, which in turn is subjected to challenge in the present Original Petition. 4. Referring to the mandate under Section 4 (1) (a) (i), the learned senior counsel appearing for the petitioner submits that the Kodaikanal property was liable to be assessed only at the hands of the O.P. No. 15314 of 2002 : 3 : husband of the petitioner. The conveyance being a 'Gift', there was no “adequate consideration”, which according to the senior counsel can only be a 'monetary consideration' and nothing else. Accordingly, it is asserted that the second respondent went wrong in declining the relief sought for. 5. The learned standing counsel appearing for the respondents, with reference to the statement filed on behalf of the respondents, submits that the proposition made from the part of the petitioner is not liable to be accepted, for the reason that the execution of Gift and nature of conveyance were not properly proved by the petitioner. It is also stated that, it was for the petitioner to prove the Gift, so as to have the benefit provided under Section 4 (1) (a) (i) of the Act. Simultaneously in paragraph 2 of the said statement, it is stated that the question regarding the nature of conveyance, particularly as to the Gift could not unfortunately be examined so far. It is further stated in paragraphs 3, 4 and 5 of the said statement that the contention of the petitioner cannot be accepted, unless and until the Gift was proved. Paragraph 4 of the statement says it as follows: “It is respectfully submitted that if the property has been received by way of gift from her husband it is eligible for exclusion from her wealth for assessment years 1998 - 1999 and 1999 - 2000 for which she showed as a part of her O.P. No. 15314 of 2002 : 4 : wealth. It is difficult to accept that inclusion of this item was an inadvertent mistake, till the claim of gift is proved” It is also asserted in paragraph 5 of the said statement that the legal proposition shall be applied only if the factum of acquisition of property by way of Gift is proved, which has been reiterated in the subsequent paragraph as well. 6. The learned senior counsel appearing for the petitioner submits that the contention taken by the respondent is not liable to be accepted, particularly when there was absolutely no doubt or dispute with regard to the nature of conveyance by way of 'Gift” was very much discernible from the contents of Ext.P1 to Ext.P3 assessment orders and hence that it is not for the appellate authority to take a “U” turn doubting the same. Anyhow, the second respondent has very much accepted the case put forth by the petitioner to exempt the 'Madras property' in place of 'Kodaikanal property', as requested by the petitioner. This being the position, this Court finds it necessary to give an opportunity to the respondents to examine the nature of conveyance and satisfy whether there was a valid gift or not, before extending the benefit of Section 4 (1) (a) (i) of the Act. 7. In the above circumstances, the impugned order i.e. Ext.P1 is set aside with regard to the assessment years 1998 - 1999, 1999 - O.P. No. 15314 of 2002 : 5 : 2000 and the second respondent is directed to reconsider the matter, after giving an opportunity of hearing to the petitioner, to prove the Gift stated as effected by the husband of the petitioner. On satisfying the position, appropriate orders shall be passed by the second respondent as to the claim put forth by the petitioner, as expeditiously as possible, at any rate, within a period of 3 months from the receipt of a copy of this judgment. The Original Petition is disposed of accordingly. P. R. RAMACHANDRA MENON, JUDGE kmd