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TMI Blog1971 (2) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee to make a fresh gift in respect of the disputed amount after the coming into force of the Hindu Succession Act in 1956 and whether the mere fact that she did not do so would result in her not becoming entitled to the benefit accruing under the aforesaid Act ?" One Sri Bal Kishan was a partner in the firm, M/s. Moola Chand Ram Prasad. He died in December, 1947. The assessee, his widow, inherited an amount of Rs. 2,56,998 which at the death of Bal Kishan stood to his credit in the books of the partnership. The assessee was assessed to income-tax on the interest accruing on that sum up to the assessment year 1953-54. In March, 1953, she transferred a sum of Rs. 1,25,500 to each of the wives of her two sons. Consequently, she did not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous years, and as no interest was actually received by the assessee on the moneys so transferred, there was no reason for assessing any interest in the hands of the assessee. The Income-tax Officer appealed to the Tribunal, and the Tribunal has allowed the appeals holding that the assessee was not competent in law to alienate any property inherited by her from her husband and that the transfers made in favour of her daughters-in-law were invalid in the absence of any legal necessity or consent by the reversioners. The Tribunal also held that the provisions of the Hindu Succession Act, 1956, could not be employed for validating the transfers so made by the assessee and, if at all, it would be necessary for the assessee to make fresh tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property, she could not be said to be possessed of that property any longer. " (Emphasis ours). It is, therefore, clear that the two transfers of Rs. 1,25,000 effected by the assessee in favour of her daughters-in-law were valid transactions binding on her, and, therefore, the interest accruing on those amounts after their transfer cannot be considered as her income. The Tribunal has erred in holding that the income accruing on those amounts can be included in the total income of the assessee. We answer the first question referred in the negative and in favour of the assessee. In the circumstances, the second question does not arise. The assessee is entitled to her costs which we assess at Rs. 200. Counsel's fee is assessed in the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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