COMMISSIONER OF WEALTH TAX Vs. N G REDDY

JUDGEMENT

(1.) BY this application, the Commissioner of Wealth -tax, Mysore at Bangalore, requires the Appellate Tribunal to refer to the High Court certain questions of law, which are said to arise out of the Tribunal's order dated 5th April, 1963, in W.T.A. No. 533 of 1962 -63. Inasmuch as, in our opinion, questions of law do arise out of the aforesaid order, we hereby draw up an agreed statement of the case and refer it to the High Court of Mysore at Bangalore under section 27(1) of the Wealth -tax Act.

(2.) N . G. Reddy is the karta of a Hindu undivided family. In the assessment to wealth -tax of the family for the assessment year 1957 -58, the Wealth -tax Officer included a sum of Rs. 1,34,025 being the investments standing in the names of the assessee's relations as follow : Rs.(1) Mrs. N. Sarojini Devi - wife ... 69,261(2) N. Santhosh Reddy - son ... 34,707(3) Miss N. Saraswathi Reddy - unmarried daughter ... 16,534(4) Miss. N. Leenatha Devi - minor daughter ... 13,533

(3.) COPY of assessment order is annexure 'A' and forms part of the case. The assessee appealed to the Appellate Assistant Commissioner and contended as before the Wealth -tax Officer and also that in a Mitakshara family, the father had the power of making within reasonable limits gifts of ancestral movable property without the consent of the sons as gifts for natural love and affection, and that the reasonableness or otherwise of the gifts would have to be judged by comparing the value of the gifts with the total of the movables owned by the family and that in this case, the assets standing in the names of the four persons concerned represented gifts made by the karta of the Hindu undivided family to his very near relations out of natural love and affection. Lastly, it was contended, that the reasonableness or otherwise of gifts is not a matter for the decision by the departments, as it was solely one between the karta and his relations.