REVA INVESTMENT PVT.LTD. vs COMMNR.OF GIFT TAX,GUJARAT-II — C.A. No. 1934/1998

Case Summary: Reva Investment Pvt. Ltd. v. Commissioner of Gift Tax, Gujarat II (2001) The Supreme Court allowed Reva Investment's appeal, holding that the company's transfer of jewellery to twelve wholly-owned subsidiaries in exchange for shares did not constitute a taxable "deemed gift" under Section 4(1)(a) of the Gift Tax Act, 1958. Although the jewellery's market value (Rs. 13,91,350) exceeded the share face value (Rs. 5,69,400), the Court found no gift because the shares derived their actual value from the jewellery transferred, making the consideration adequate. The Court rejected the revenue's valuation approach, emphasizing that transfers between related parties require similar evaluation standards and that inadequacy of consideration cannot be inferred merely from numerical differences without evidence of tax-evasion intent. This case analysis is maintained by casestatus.in based on publicly available court records.