COMMISSIONER OF WEALTH TAX Vs. GORDHANBHAI JETHABHAI PATEL

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal has referred the following question to this court for its opinion under section 27 of the Wealth -tax Act, 1957 :

(2.) PRIOR to partition on May 21, 1962, the joint family of Gordhanbhai Jethabhai Patel consisted of Gordhanbhai his wife his five sons and one unmarried daughter. The Joint family properties were partitioned on May 21, 1962, and in that partition, Gordhanbhai, his wife and five sons were given their shares. However no provisions was made for the unmarried daughter. Gordhanbhai had made a gift of Rs. 75,001 on October 20, 1966, to the Hindu undivided family consisting of himself, his wife and his unmarried daughter. The Wealth -tax Officer added the sum of Rs. 75,001 to the wealth of the assessee for the assessment year 1967 -68 on the ground that the Hindu undivided family to whom the said sum was gifted by the assessee did not exist, as there was a partition on May 21, 1962. For that reason, he also added Rs. 86,250 to the wealth of the assessee for the assessment year 1968 -69. The assessee had contended before the Wealth -tax Officer that as no provision was made for the unmarried daughter, the Hindu undivided family consisting of himself and his unmarried daughter continued in spite of that partition. The Wealth -tax Officer did not accept this contention and passed the order accordingly. Against these orders passed separately for the assessment years 1967 -68 and 1968 -69, the assessee preferred two separate appeals before the Appellate Assistant Commissioner of Wealth -tax. Before the Appellate Assistant Commissioner two contentions were raised. One was regarding inclusion of annuity deposit in the net wealth, with which we are not concerned in this reference, and the other was in respect of inclusion of the value of the gifts made to the Hindu undivided family. The appeals were allowed so far as the inclusion of the annuity deposits in the net wealth concerned, but they were dismissed in so far as they pertained to the gifts made to the Hindu undivided family. The assessee, therefore, preferred two appeals to the Income -tax Appellate Tribunal. The Tribunal was of the view that, in spite of the partition, there was a Hindu undivided family of Shri Gordhanbhai Patel and his unmarried daughter. It, therefore, allowed both the appeals. The revenue, feeling aggrieved by the decision of the Tribunal, preferred to file reference applications before the Tribunal and called upon the Tribunal to refer the following two questions to this court :

(3.) WHAT is contended by learned counsel for the Revenue is that, on partition of the joint family property on May 21, 1962, the Hindu undivided family of Gordhanbhai Patel came to an end as all the persons who had right in the joint family property were given their share in the property. He submitted that as the members of the family became separate in estate, the family thereafter ceased to be joint. It is no doubt true that where there is no joint estate, the family ceases to be joint. As a result of partition the larger family of Gordhanbhai Patel consisting of his wife and his five sons and unmarried daughter did cease to exist after May 21, 1962, but that is not the question with which are concerned in the reference. The gift was made according to the assessee, to the Hindu undivided family consisting of himself and his unmarried daughter. These gifts have been included in the net wealth of the assessee on the ground that the Hindu undivided family to which the said gifts were made in fact did not exist when the gifts were made in view of the partition which had taken place in 1962.