K. GNANAPRAKASAM, J.

The assessee, namely, Khaja Moideen, was a citizen of Malaysia and a non-resident during the relevant assessment years 1975-76 and 1976-77. In the said assessment years, the assessee made gifts of Malaysian dollars to his mother, Tmt. K. M. Fathima Ghani, who is in India and the rupee equivalent of such gifts amounted to Rs. 35, 242 for the assessment year 1975-76 and Rs. 52, 728 for the assessment year 1976-77. The gifts were made by purchasing rupee drafts from banks in Kuala Lumpur. As the gift drafts were purchased in Kuala Lumpur and given to the mother of the assessee in India, exemption was claimed in respect of these gifts under section 5(1)(ii) of the Gift-tax Act, 1958.

The Gift-tax Officer denied the exemption claimed. But, on appeal, the Appellate Assistant Commissioner of Income-tax accepted the assessee's contention that the gifts were complete as soon as the foreign money was deposited with the foreign bank with the intention of donating it to the donee in India and that under the Foreign Exchange Regulation, he had no other option but to make the gift through banking channels by entrusing the foreign money to the bank and instructing it to remit it to the credit of the donee. Aggrieved by the order of the Appellate Assistant Commissioner of Income-tax, the Department preferred an appeal before the Appellate Tribunal and the Tribunal, while upholding the order of the Appellate Assistant Commissioner, rejected the objections of the Department and dismissed the appeal.

In the abovesaid circumstances, the Commissioner of Gift-tax Department, Madras, secured a reference to this court as per the provisions of section 26(1) of the Gift-tax Act, 1958, and raised the following question,

"Whether, on the facts and in the circumstances of the case, the assessee was not liable to gift-tax in view of the exemption provided to the gifts made by him under section 5(1)(ii) of the Gift-tax Act, 1958, for the assessment years 1975-76 and 1976-77 ?"

The learned advocate appearing for the Revenue has fairly brought to the notice of this court that a similar question had been answered in the case of CGT v. K. M. Ziauddin. In that case, similar facts were involved and identical questions were raised for the determination of the court. In the said case also, the gifts were made by an individual, who was an assessee not ordinarily a resident of India, during the relevant assessment year. He had purchased gifts by way of drafts in Malaysia at Kuala Lumpur in the name of the donee in India. According to the assessee, the gifts took place at Kuala Lumpur and the gifts were accepted on behalf of the daughter in Kuala Lumpur itself and the assessee purchased the draft thereafter. The assessee, therefore, contended that the gifts were movable properties situated in a foreign country and the assessee being not ordinarily a resident, was entitled to exemption under section 5(1)(ii) of the Gift-tax Act, 1958.

On an earlier occasion, this court in the case of CGT v. S. Raja Ramalingam, had considered whether there was a request made by the donee to the donor in a foreign country to send the gift by draft and by post. This court, in the absence of any request by the donee to the donor to send the draft by post, came to the conclusion that the gift was complete in India where the donee accepted the gift as the donor posted the draft without the express request of the donee and the post office cannot be regarded as an agent of the donee and rejected the claim of the assessee. The very same view was taken in the case of CGT v. P. D. Kumaresan, where also the court held that the acceptance took place after the draft came to India by post and was received by the assessee's father and, therefore, the subject-matter of the gift was in India at the time of the acceptance of the gift and at the time when the transfer was made, the subject-matter of the gift was in India and denied the exemption to the assesseeBut, in those cas