JUDGMENT R.K. Agrawal, J.
1. The Tribunal, Allahabad, has referred the following questions of law under Section 26(3) of the GT Act, 1958, hereinafter referred to as the Act, for opinion to this Court ;
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the question of taking the amounts in question under the GT Act, 1958, cannot arise ?
2. Whether, on the facts and in the circumstances of the case, the finding of the Tribunal is vitiated as it has failed to take into account that the return was filed by the HUF itself admitting the gift of the two amounts ?"
2. Briefly stated, the facts giving rise to the present reference are as follows:
The present reference relates to the asst. yr. 1972-73. The respondent is an HUF. Its Karta made two gifts in favour of Smt. Deva Gupta who is the wife of the Karta, the first one of Rs. 8,000 on 4th Sept., 1971, and the second one of Rs. 15,000 on 28th Sept., 1971. The Karta also executed a gift deed in 28th Sept., 1971. In the assessment under the GT Act, the respondent claimed exemption in respect of these gifts under Section 5(1)(viii) of the Act. The GTO declined to grant exemption on the ground that the gifts were not made by Sita Ram Gupta in his individual capacity but as the Karta of the HUF. Feeling aggrieved, the respondent preferred an appeal before the AAC. The AAC noticed that the amount of gifts came from HUF funds. He was of the opinion that Sita Ram Gupta could not have gifted such funds to his wife so long as his interest and share in the HUF were not determined. In this view of the matter, he held that it was not a gift by the individual to his wife and that the exemption under Section 5(1)(viii) of the Act was not available. Still feeling aggrieved, the respondent preferred an appeal before the Tribunal. The Tribunal held that the gifts were exempt and accordingly allowed the appeal. However, at the instance of the CGT, it had referred the following question of law for opinion of this Court:
"Whether, on the facts and in the circumstances of the case, the gifts of Rs. 8,000 and Rs. 15,000 made on 4th Sept., 1971, and 28th Sept., 1971, by Shri Sita Ram Gupta as Karta of his HUF out of the funds of the family could not be subjected to gift-tax in view of Section 5(1)(viii) of the GT Act 7"
3. This Court vide order dt. 5th March, 1979, since reported as CGT v. Sita Ram Gupta 1981 UPTC 365 had held that it is not disputed that the gifts were made by Sita Ram Gupta as Karta of his HUF. However, the Court was of the opinion that it is difficult to agree that the document of gift could be interpreted as a deed of gift by the Karta to a member of HUF. There appears to be some confusion in the statement of the case. The Court returned the reference unanswered with the direction to the Tribunal to rehear the appeal in the light of the observation made in the order. Pursuant to the order passed by this Court, the Tribunal reheard the appeal filed by the respondent and allowed the same with the following observations :
"There is another consideration. Even if it was to be supposed for the sake of argument that no gifts could be made by Late Sri Sita Ram Gupta in respect of HUF funds to Late Smt. Deva Devi, the result would be that there would be no gifts. It would, therefore, further follow that the question of imposition of gift--tax thereon or of claiming exemption under Section 5(1)(viii) would not arise. Thus, the submissions made on behalf of the Revenue would not help or support the orders of the GT authorities. Thus, whatever way the matter is looked at, the question of taxing the amounts in question under the GT Act, 1958, cannot arise. We hold accordingly."
4. We have heard Sri A.N. Mahajan, learned standing counsel for the Revenue. Nobody has put in appearance on behalf of the respondent-assessee.
5. Learned standing counsel for the Revenue has submitted that as the gifts in question have been made by the Karta of the HUF to his wife under Section 5(1)(viii) of the Act, exemption is not available. According to him, exemption under Section 5(1)(viii) is available when a gift is made to a spouse and Karta does not have any spouse. Even if the contention of the learned counsel for the Revenue is accepted, we find that the Tribunal had held that the gift, if it is held to be given by the Karta of the HUF to his wife is not a valid gift and, therefore, the question of exemption of tax does not arise.
In this view of the matter, we answer the first question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue and the second question is returned unanswered. However, there shall be no order as to costs.