KHODAY ESWARSA & SONS vs COMMR. OF GIFT TAX — C.A. No. 2751 - 2752/1998

Summary: Khoday Eswarsa & Sons v. Commissioner of Gift Tax The Supreme Court allowed the appellant's appeal and ruled that no gift tax was payable. Although the Court accepted that the licensing agreement constituted a deemed gift under Section 4(1)(a) of the Gift Tax Act (as consideration was inadequate), the gift was terminable with six months' notice. Under Rule 11(1), capitalized value must be computed based on the period for which the gift is non-revocable; since the gift was revocable within six months (less than one year), its value was nil, resulting in zero gift tax liability. This case analysis is maintained by casestatus.in based on publicly available court records.