NANHI DEVI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) TWO questions have been referred by the Income-tax Appellate Tribunal for the opinion of this court. They are as follows :

(2.) WHETHER, on the facts and in the circumstances of the case, it was necessary for the assessee to make a fresh gift in respect of the disputed amount after the coming into force of the Hindu Succession Act in 1956 and whether the mere fact that she did not do so would result in her not becoming entitled to the benefit accruing under the aforesaid Act ?

(3.) IT is, therefore, clear that the two transfers of Rs. 1,25,000 effected by the assessee in favour of her daughters-in-law were valid transactions binding on her, and, therefore, the interest accruing on those amounts after their transfer cannot be considered as her income. The Tribunal has erred in holding that the income accruing on those amounts can be included in the total income of the assessee.