Per Sathyanarayana - These appeals filed by the assessee relate to the assessment years 1976-77 and 1977-78 for which the previous years ended on 31-3-1976 and 31-3-1977.

2. The assessee is a retired Government servant. Just before his retirement he was abroad on a UN assignment. According to the GTO, the assessee, during the previous year relevant to the assessment year 1976-77, made certain deposits in banks in the name of his wife, Smt. L. Saraswathy Amma. The amount so deposited totalled Rs. 84,330. The GTO treated the transactions as gift from the assessee to his wife and after allowing exemption of Rs. 50,000 under section 5(1)(viii) of the Gift-tax Act, 1958 (‘the Act’), he brought the balance of Rs. 34,330 to the gift-tax by his order dated 15-3-1982. According to the GTO, the assessee, during the previous year, on 2-4-1976, relevant to the assessment year 1977-78, renewed the deposit of Rs. 25,000 (which was originally made by the assessee in his own name on 2-4-1974) in the name of his wife, Smt. L. Saraswathy Amma. He treated this as a gift by the assessee to his wife and brought it to tax by his order dated 15-3-1982.

3. Aggrieved by the orders of the GTO the assessee preferred appeals to the first appellate authority. Before the first appellate authority, the assessee contended that the deposits were made in the name of his wife for the sake of convenience and that they did not constitute any gifts by him to his wife. The first appellate authority did not accept the assessee’s contention and confirmed the orders of the GTO and held them as gifts.

4. Aggrieved by the orders of the first appellate authority the assessee is in present appeals before us. At the time of hearing the assessee filed before us a paper book showing among other things the wealth-tax assessment order dated 15-9-1983 for the assessment year 1977-78 by the WTO and computation of net wealth for the assessment year 1976-77 by the Settlement Commission in their order dated 23-4-1981. The counsel for the assessee urged that the deposits made in the name of the assessee’s wife were shown by the assessee as his deposits but standing in the name of his wife. Smt. L. Saraswathy Amma and were offered in his wealth-tax assessment and that they have been accepted by the Settlement Commission in their order dated 23-4-1981 and taxed as the assessee’s wealth, accordingly, by the WTO for the assessment years 1976-77 on 10-6-1981 and 1977-78 on 15-9-1983, respectively. He submitted that in these circumstances there is no question of the department treating the deposits under consideration as gifts made by the assessee to his wife in these two assessment years under appeal.

5. The arguments of the departmental representative were to the following effect. The fact that the assessee showed those fixed deposited in his wealth-tax returns and the assessment by the WTO treating the said deposits as the assessee’s wealth, are not relevant to the issue for the gift-tax purposes. There was express acceptance on the part of the assessee’s wife of the gifts made by the assessee when she made applications for making fixed deposits in the bank. The theory of convenience cannot be accepted because certain later deposits made by the assessee were in the joint names of the assessee and his wife. The assessee could have made the deposits under appeal in the joint names if he really meant convenience. He could not have made these deposits under appeal in the single name of his wife.

6. The assessee’s counsel in reply stated that the assessee had not shown the deposits under appeal in his wealth-tax returns under section 4(1)(a)(i) of the Wealth-tax Act, 1957. Had he shown them as such, it would have meant that he made these gifts and then offered them for wealth-tax assessment under the said provision. But in the wealth-tax returns for these assessment years the assessee had shown the deposits as his own but standing in the name of his wife.

7. We have considered the rival subm