COMMISSIONER OF GIFT-TAX Vs. HARI CHAND

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has stated the following question of law for our opinion :

(2.) THE facts are simple. The assessee is a Hindu undivided family and Shri Hari Chand is its karta. The assessment year in question is 1966-67, the previous year being Samvat year 2023. During the assessment year, Hari Chand made a gift of Rs. 49,000 from the funds of the Hindu undivided family to his wife, Sunder Shanta, and a further gift of Rs. 4,900 to his minor daughter, Miss Bina Devi. In the gift-tax return filed by the karta of the Hindu undivided family for the year in question, exemption under Section 5 (1) (viii) was claimed in respect of the gift made to Smt. Sunder Shanta. This claim was negatived by the Gift-tax Officer with the following observations :

(3.) THE assessee then went in appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner allowed the appeal and held that the gift by the karta to his wife was exempt under the provisions of Section 5 (1) (viii) of the Act. The Appellate Assistant Commissioner observed that " person " in Section 5 includes Hindu undivided family. Therefore, he gave effect to Clause (viii) of Section 5 (1 ). Against the order of the Appellate Assistant Commissioner, the department moved the Income-tax Appellate Tribunal, Chandigarh Bench. The Tribunal affirmed the decision of the Appellate Assistant Commissioner. For its opinion, the Tribunal relied on Jana Veera Bhadrayya v. Commissioner of Gift-tax, [1966] 59 I. T. R. 176 (A. P. ). . The department being dissatisfied moved the Tribunal under Section 26 (1) of the Gift-tax Act, and that is how the question of law already stated has been referred for our opinion.