LAWS(MAD)-1969-12-15

COMMISSIONER OF GIFT TAX Vs. RANGASAMI NAIDU P

Decided On December 16, 1969
COMMISSIONER OF GIFT TAX, MADRAS Appellant
V/S
P. RANGASAMI NAIDU Respondents

JUDGEMENT

(1.) THESE cases, two references under Section 26(1) of the Gift Tax Act, 1958 and petitions under Article 226 of the Constitution by different parties, raise an important and difficult question of law. The question is, whether there is a gift within the meaning of the Act, when a member of Hindu undivided family the father in these cases, by his unilateral act converts his separate or self-acquired property into joint family property, that is in figurative language, when he throws his self acquisition into the common hotchpot of the joint family and impresses the same with the character of joint family property. As conflicting views on the question are found expressed in different High Courts, the matter has been placed before a Full Bench.

(2.) IN T. C. 272 of 1964 the reference has been obtained by the Commissioner of Gift Tax, Madras. The assessee in that case who had four sons, two of them minors, by a deed dated 21-5-1958, drawn in the form of an affidavit, made a declaration the relevant portion of which runs:

(3.) WHILE the Act extends the definition of 'gift' by deeming to be gifts certain transfers specified in Section 4 which prima facie are not gifts, further coverage under the definition of 'gift' is achieved by defining 'transfer of property' to include also what ordinarily may not, be considered transfers of property. Section 2(xxiv) defines 'transfer of property' thus:--