Khoday Eswarsa And Sons vs Commissioner Of Gift Tax

The Supreme Court addressed the interpretation of the Gift Tax Act, 1958, specifically Section 4(1)(a) and Section 5(1)(xiv), in determining whether a transaction constituted a deemed gift. The Court upheld the Income Tax Appellate Tribunal's finding that the transfer of business to a private limited company was a deemed gift due to inadequate consideration, rejecting the appellant's claim of exemption under Section 5(1)(xiv) as the transaction was not bona fide. Consequently, the Court affirmed the High Court's ruling against the appellant regarding the taxable gift for the assessment year 1970-71.