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TMI Blog1969 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for the opinion of this court under section 66(1) of the Income-tax Act, 1922 (hereinafter called "the Act ") :- " Whether, on the facts and in the circumstances of the case, the gift of Rs. 4 lakhs was voidable and as such the interest accruing on the aforesaid gifted amount did not accrue to the family for income-tax purposes?" The statement of the case submitted by the Tribunal shows that the assessee is a Hindu undivided family whose karta is Shri Ramswaroop. By a deed dated 25th February, 1956, Shri Ramswaroop gifted to the under mentioned persons the amounts noted against their names: 1. Shri Shankerlal (brother of Ramswaroop) 80, 000 2. Shri Prem Narain (son of Shankerlal) 40,000 3. Shri Surajnarain (son of Shankerlal) 40,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above years. Appeals were preferred to the Appellate Assistant Commissioner, Udaipur, and the said officer called for a report from the Income-tax Officer as to the circumstances under which the gift had been made and also as to the real motive behind the gifts. After receiving the report, the Appellate Assistant Commissioner, Udaipur, decided the appeals in favour of the assessee. Appeals against the orders of the Appellate Assistant Commissioner were filed before the Tribunal by the department and the Tribunal directed that the aforesaid amount together with interest thereon for each of the above years be deleted from the respective assessments on the ground that the Rajasthan High Court, in the case of Commissioner of Income-tax v. Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the authority which the karta possessed to deal with it for family purposes. " This case has been relied on in Brahamdutt Bhargava's case. Learned counsel for the department has relied on A. Basaviah Gowder v. Commissioner of Gift-tax and Smt. Valluri Janakamma v. Commissioner of Gift-tax . Brahamdutt Bhargava's case is binding on us and we do not feel any necessity for referring the case to a larger Bench, specially for the reason that in our view whether the gifts are void or voidable, the interest accruing on the gifted amounts did not accrue to the assessee for the purpose of income-tax. We may, however, point out that the terms " void " and " voidable " are often confused, and distinction between these two is not properly recog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fts are treated as void, it is not the assessee who has earned any income out of the amount of Rs. 4,00,000. Under the Income-tax Act, tax is leviable under section 3 on the total income of the previous year of every individual, Hindu undivided family, company and local authority and of every firm or other association of persons or the partners of the firm or the members of the association individually. Inclusive definition of " income " has been given in section 2(6C) of the Act. The case before us does not fall within the inclusive definition of income. In the instant case, the entire sum of Rs. 4,00,000 had passed into the hands of other persons and they were earning income from that amount and not the assessee. It cannot be contended th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sisted in the disposal by the taxpayer of part of his property in such a way that the income should no longer be receivable by him, while at the same time he retained certain powers over, or interests in, the property or its income. The Legislature's counter was to declare that the income of which the taxpayer had thus sought to disembarrass himself should, notwithstanding, be treated as still his income and taxed in his hands accordingly." This is not the case here. There is no doubt that in this case Shri Ramswaroop when he made the gift had transferred the amount of Rs. 4,00,000 to the donees without reserving any right in that amount of rupees four lakhs to the assessee or to himself. This being the situation, in our opinion, our answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the amount of rupees four lakhs which had been gifted by Shri Ramswaroop to the various donees referred to above did not remain in the hands of the assessee inasmuch as this entire amount of four lakhs had passed into the hands of the donees. It may be that the members of the assessee family may have a right to recover back those amounts under certain circumstances; but merely because of this, that sum cannot be treated as their asset of such tangible value as may attract the provisions of section 3 of the Act for the purpose of assessment of wealth-tax. Learned counsel for the department has relied on section 4(1)(a)(iv) of the Act. The relevant provision is as follows: " In computing the net wealth of an individual, there shall be incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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