( 1 ) THE Income Tax Appellate Tribunal, Ahmedabad Bench "a" has referred the following question for the opinion of this Court under the Gift Tax Act,1958 (hereinafter referred to as "the Act") :"whether, on the facts and in the circumstances of the case, the assessee was rightly taxed under the Gift-tax Act, 1958 in respect of the shares of the value of Rs. 52,744. 00 given to Bhavana Nalinkant Trust ?"

( 2 ) THE applicant-assessee is an individual. The assessment year is 1980-81 and the relevant previous year ended on 31/3/1980. On 19/2/1979 the assessee created irrevocable trust with initial sum of Rs. 1,000. 00 by executing a deed of trust known as "bhavana Nalinkant Trust" (hereinafter referred to as the Trust ). On 22/2/1979 the assessee addressed a letter to the trustees of the Trust informing that she was gifting certain shares which were of her individual ownership. Along with the said letter the transfer forms duly completed and signed accompanied by the share certificates were also forwarded to the trustees.

( 3 ) IT appears that the market value of the shares passed on to the trustees on 22/2/1979 was Rs. 52,744. 00. The assessee filed a gift tax return on 30/6/1980 showing taxable gift at Rs. Nil. However, the Gift Tax Officer after allowing statutory exemption of Rs. 5,000. 00 worked out the taxable gift at Rs. 47,744. 00. The Gift Tax Officer was of the opinion that as the ownership over the corpus of the trust funds vested with the trustees, the assessees claim that the donor and the donee were the same person was not acceptable. It is pertinent to note that the assessee, who was settlor of the trust was the sole beneficiary of the trust as per the trust deed.

( 4 ) THE assessee went in appeal before the Appellate Assistant Commissioner but did not succeed. According to the appellate authority if the assessees plea that the donor and donee were the same person was accepted, the very purpose of creation of trust would be frustrated and the trust would be invalid. Alternatively, the appellate authority held that though the donor and the beneficiary may be the same individual, yet they were different persons acting in different capacities. The assessee preferred Second Appeal before the Tribunal. The Tribunal for the reasons stated in its order held that on plain reading of clause 4 of the deed of trust it was apparent that the trustees had power to accelerate the date of distribution of the trust fund and the said clause further provides that the trustees had a power to eliminate the assessee altogether as a beneficiary at any time before the date of distribution. The Tribunal therefore held that the assessee was not entitled to invoke the doctrine of self to self and as the assessee and the trust were two distinct and different persons the provisions of the Act, with special reference to the definitions donee, donor, gift and transfer of property contained in Section 2 of the Act, stood attracted. It is out of this order of the Tribunal that the aforesaid question has arisen.

( 5 ) MR. J. P. SHAH, learned Counsel for the applicant-assessee submitted that the Tribunal had fallen into error while interpreting clause (4) of the deed of trust relating to distribution, that the assessee continued to be the owner of the assets in question in as much as the assessee was liable to income tax in relation to income arising from the said assets and also liable to wealth tax in relation to the said assets. It was further submitted that the provisions of the Gift Tax Act had to be read and construed along with the Income Tax Act,1961 and the Wealth Tax Act,1957, because it was an integrated scheme of the taxation which operated as a self contained code. It was further submitted that though the trustees may be treated as legal owners of the assets in question, for the purpose of ascertaining liability to tax, beneficial ownership had to be taken into consideration and such beneficial ownership was always subject