9911796707
TMI Blog1964 (11) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant facts from the order of the Appellate Tribunal. 2. The respondent, Keshavlal Lallubhai Patel, hereinafter referred to as the assessee, was assessed till the assessment year 1952-53 (Accounting year ending March 31, 1952) as an individual. On April 18, 1951, he swore an affidavit before the Deputy Nazir, District Court, Ahmedabad, throwing all his self-acquired properties mentioned in the affidavit, into the common hotchpotch of the Hindu undivided family, consisting of himself and his two sons. The assessee had a wife and two sons, one a major and the other a minor. However, no entries in the books were passed. On June 12, 1951, an oral partition was effected between the several members of the Hindu undivided family, and consisten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove question in favour of the assessee. As stated above, it granted a certificate under section 66A(2) of the Act. 5. Mr. Rajagopala Sastri, the learned counsel for the Revenue, urges before us that it is a clear case of indirect transfer by the assessee, within section 16(3)(a)(iii) and section 16(3)(a)(iv) of the Act. He does not dispute the genuineness of the transactions. He says: Look at the position antecedent to the affidavit dated April 18, 1951. The property in dispute belonged to the assessee. Then look at the position after the partition. The properties come to be held by the wife and the minor son. These two facts, according to him, show that there was a transfer, and it was an indirect transfer because the joint Hindu family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usband to the wife; (2) The assets must be transferred directly or indirectly. 8. Two questions arise: Is the word 'transfer' used in the technical sense or in the popular sense? And, secondly, what is comprehended in the word 'indirectly'? 9. Some assistance is derived in ascertaining the meaning of the word 'transfer' by looking at the language of section 16(1)(c). In that clause, the legislature uses the words 'settlement', 'disposition' and 'transfer', and in the expression 'settlement or disposition' is included 'any disposition, trust, covenant, agreement or arrangement'. In this clause, the word 'transfer' is clearly used in the strict sense. If the legislatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the son would gift Rs. 30,000 to the mother. This Court held that it was a palpable device and a trick and the two cross transactions amounted to an 'indirect transfer' within section 16(3)(a)(iii). In effect, this Court held that the father used his son as a conduit pipe and the son used his father as a conduit pipe to gift Rs. 30,000 each. Mr. Sastri relies on the words "chain of transfers" used by Hidayatullah, J., in the following sentence: "A chain of transfers, if not comprehended by the word 'indirectly' would easily defeat the object of the law which is to tax the income of the wife in the hands of the husband, if the income of the wife arises to her from assets transferred by the husband." 12. But in the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "obviously no question of transfer of assets can arise when all that happens is separation in status, though the result of such severance in status is that the property hitherto held by the coparcenary is held thereafter by the separated members as tenants-in-common. Subsequent partition between the divided members of the family does not amount either to a transfer of assets from that body of the tenants-in-common to each of such tenants-in-common". 14. The Punjab High Court came to the conclusion in Jagan Nath v. The State of Punjab (1962) 64 P.L.R. 22. Agreeing with these authorities, we hold that when the joint Hindu family property was partitioned, there was no transfer of assets within section 16(3)(a)(iii) and (iv) to the wife or th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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