COMMISSIONER OF GIFT TAX Vs. MUNSHI LAL

JUDGEMENT

(1.) The following question has been referred to this Court under section 26(1) of the Gift Tax Act, 1958 :-

(2.) The case relates to two assessees Shrimati Sharbati Devi and Munshi Lal. The assessment yr concerned is 1965-66 corresponding to the previous year which ended on March 31, 1965. The two assessees held one-half share each in a building situated in Ram Nagar, Delhi. During the previous year, each of the two assessees impressed his or her share in the said property with the character of joint family property. Question arose whether the assessees were liable to pay gift tax because of their impressing their shares in the property with the character of joint family property. The Gift Tax Office? and the Appellate Assistant Commissioner decided the matter against the assessees and held that they were liable to pay gift tax. On further appeal to the Appellate Tribunal the Tribunal held that the assessees were not liable to pay gift tax as the act of the assessees in throwing their individual share in the joint family hotchpotch did not amount to gift within the meaning of the Gift Tax Act. The question reproduced above was thereafter referred to this Court at the instance of the Commissioner of Gift Tax.

(3.) We have heard Mr. Sharma on behalf of the Revenue and Mr. Mohan Bihari Lal on behalf of the assessees, and are of the opinion that the question referred to this Court should be answered in the negative and in favour of the assessees. The matter is concluded by the decision of the Supreme Court in the case of Goli Eswariuh v. Commissioner of Gift-tax, A .P., (1970) 76 ITR 675 (1 Hedge. J , speaking for the Court in that case, observed :