A BASAVIAH GOWDER Vs. COMMISSIONER OF GIFT MADRAS

JUDGEMENT

(1.) ONE Basaviah Gowder was the karta of Hindu undivided family consisting of himself and his two sons. He had a divided brother, one Nanjunda Gowder. A partition had taken palace between them on June 14, 1951, and the properties which Basaviah Gowder had were properties which fell to his share at this partition. On October 10, 1957, Basaviah Gowder executed a gift deed whereby he made a gift of certain properties to his two sons, to hid divided brother and to a daughter. Basaviah Gowder died on March 23, 1959. A return under the Gift-tax Act was duly made by his son, Krishnan, as his legal representative. The value of the gift was given as Rs. 38, 377 and after deducting the exempted limit of Rs. 10, 000 the balance of Rs. 28, 377 was offered as the taxable amount of the gifts. The Gift-tax Officer however declined to accept this value and proceeded to estimate the value of the gift at Rs. 1, 82, 000 and arrived at the net taxable value of the gift Rs. 1, 72, 000. Against this assessment, an appeal was taken and before the appellate authority the contention was advanced that as Basaviah Gowder was the properties, he had no capacity to make a gift of the joint family properties. It was claimed that the gift being invalid, no gift-tax was leviable. This contention however was rejected. A further appeal was taken to the appellate Tribunal before whom the same contention was pressed. The Tribunal did not accept these contentions. It stated :

(2.) ON the appeal failing and on the application of the assessee, the following questions were referred for the decision of this court under section 26(2) of the Indian Gift-tax Act.

(3.) THE question that arose for decision in that case is clear from the extract above. It was whether a gift of immovable property in favour of the wife and her daughter, the latter towards her marriage portion, would be valid. It was held that the father had no such power to make the gifts. In another decision of this court, Kulasekhara Perumal v. Pathakutty, it was held by one of us that while a Hindu coparcener may dispose of his undivided share in the ancestral estate by contract and conveyance, a gift or devise by such a coparcener of his undivided interest is wholly invalid subject to certain exceptions. In that case, a coparcener purported to make a gift of his undivided share. It was observed :