TMI Blog1970 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... s impressed the character of joint Hindu family property on the self-acquired properties owned by him amounts to a transfer so as to attract the provisions of the Gift-tax Act ? " The High Court, following its earlier decision in Commissioner of Income-tax v. C. Satyanarayanamurthy, answered that question in the affirmative. The material facts as could be gathered from the statement of the case submitted to the High Court are as follows : The assessee is the Karta of his joint family. The assessment year with which we are concerned in this case is 1959-60, for which the" previous year " is the year commencing on October 23, 1957, and endings on November 10, 1958. The assessee owned movable and immovable properties which were his self-acquisitions. By a deed dated December 9, 1957, he threw into the common stock his houses bearing Nos. 6658-59 and 2731 situate at Imambavidi, Secunderabad, and a cash deposit of Rs. 1,50,000 in the firm of Messrs. Goli Eswariah, Paper Merchants, Secunderabad. In the books of account of the firm, necessary entries were made transferring the amount to the account of the family. The Gift-tax Officer treated that portion of the value of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case referred to earlier as well as in G. V. Krishna Rao v. First Additional Gift-tax Officer, Guntur and the Allahabad High Court in Commissioner of Gift-tax v. Jagdish Saran have taken the view that when a coparcener in a Hindu undivided family governed by the Mitakshara school throws his self-acquired properties into common stock, the same amounts to a " gift " under the Act. On the other hand, a Full Bench of the Madras High Court in Commissioner of Gift-tax v. P. Rangasami Naidu and VR. S. RM. Ramaswami Chettiar v. Commissioner of Gift-tax, a Full Bench of the Gujarat High Court in Dr. A. R. Sukla v. Commissioner of Gift-tax, a Division Bench of the Kerala High Court in P. K. Subramania Iyer v. Commissioner of Gift-tax, and a Division Bench of the Mysore High Court in Smt. Laxmibai Narayana Rao Merlekay v. Commissioner of Gift-tax, have taken a contrary view. To pronounce oil the question of law presented for our decision, we must first examine what is the true scope of the doctrine of throwing into the " common stock " or " common hotchpot ". It must be remembered that a Hindu family is not a creature of a contract. As observed by this court in Mallesappa Bandeppa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " is defined in section 2(xii) as follows : " ' gift ' means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth and includes the transfer of any property deemed to be a gift under section 4. " In this case we are not dealing with a deemed gift. Therefore, we need not consider the scope of section 4. Before an act can be considered as a gift as defined, there must be a transfer of property by one person to another. " Person " is defined as including a Hindu undivided family in section 2(xviii). Section 2(xxii) says that " property " includes any interest in property, movable and immovable. Section 2(xxiv) defines " transfer of property " thus : " ' transfer of property' means any disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property and, without limiting the generality of the foregoing, includes : (a) the creation of a trust in property ; (b) the grant or creation of any lease, mortgage, charge, easement, licence, power, partnership or interest in property ; (c) the exercise of a power of appointment of property vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a term of law. Further it has no precise meaning. Its meaning has to be gathered from the context in which it is used. In the context in which that term is used in section 2(xxiv), it cannot mean to " dispose of ". Otherwise, even if a man abandons or destroys his property, it would become a " gift " under the Act. That could not have been the intention of the legislature. In section 2(xxiv), the word " disposition " is used along with the words " conveyance, assignment, settlement, delivery, payment or other alienation of property ". Hence, it clear from the context that. the word " disposition " therein refers to a bilateral or a multi-lateral act. It does not refer to a unilateral act. In this connection reference may be usefully made to the decision of this court in Commissioner of Income-tax v. M. K. Stremann Therein, the assessee first threw his private properties into the common stock and afterwards there was a partition amongst the members of the family which included his two minor sons and a minor daughter, represented by their mother. The question arose whether the partition in question amounted to a transfer of assets by the assessee to the three minor children so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
