COMMISSIONER OF GIFT TAX Vs. MARUTRARAO NAYAKOJI KADAM
LAWS(KAR)-1966-9-4
HIGH COURT OF KARNATAKA
Decided on September 09,1966

COMMISSIONER OF GIFT-TAX, MYSORE Appellant
VERSUS
MARUTRARAO NAYAKOJI KADAM Respondents


Cited Judgements :-

CAPTAIN BHUPINDER KUMAR SURI VS. NARESH KUMAR SURI [LAWS(DLH)-2017-2-250] [REFERRED TO]


JUDGEMENT

K.S. Hegde, J. - (1.)THE question referred to us under section 26(1) of the Gift-tax Act (hereinafter referred to as the "Act") is "whether, on the facts and in the circumstances of the case, could the assessee be said to have gifted properties to his sons which attracted tax under the Gift-tax Act".
(2.)THE following facts have been found by the Tribunal :
(1) THE properties both movable and immovable concerned in this case were the self-acquired properties of the assessee;

(2) He divided those properties between himself and his four sons in the year 1954 and delivered to each of his sons shares in his movable and immovable properties;

(3) THE partition in the year 1954 was evidenced by an unregistered deed; and

(4) That in the year 1957 he executed a registered partition deed, under which the division effected in 1954 with slight modifications was affirmed.

It is the contention of the revenue that under the deed of 1957 the assessee gifted his properties the favour of his sons on November 10, 1957. If that contention is correct, then in view of section 3 of the Act, the gifts in question are eligible to tax.

The Income-tax Appellate Tribunal has come to the conclusion that, though the properties with which we are concerned herein were the self-acquired properties of the assessee, he threw them into the common hotch-potch in the year 1954 and thereafter they were impressed with the character of joint family properties; therefore, the partition effected by the assessee in the year 1954 is a valid partition, whether the document executed in proof of the same is valid or not. It also came to the conclusion that the true effect of the 1957 document is one of partitioning the joint family properties and the said document does not evidence any gift.

(3.)IT is now well settled that a member of a Hindu Mitakshara family can throw his self-acquired property into the common hotch-potch and thus impress it with the character of joint family property. In this connection reference may be usefully made to the decision of the Bombay High Court in Kisansingh Mohan Singh Balwar v. Vishnu Balkrishna Jogalekar, and the decision of the Andhra Pradesh High Court in Sadasiva Vittal v. Bolla Rattain. To the same effect is the decision of the Bombay High Court in Commissioner of Income-tax v. M. M. Khanna.
It is also well settled now that a member of a Hindu family by means of his unilateral declaration can impress his property with the character of joint family property whether his joint family had any other nucleus of its own or not. The throwing of the individual's property into the common hotch-potch has been held to be possible even when the common hotch-potch is empty, i.e., even if there is no nucleus of the joint family : see the decisions of the Bombay High Court in Commissioner of Income-tax v. M. M. Khanna and Kisansingh Mohansing Balwar v. Vishnu Balkrishna Jogalekar. This conclusion receives support from the decision of the Supreme Court in Commissioner of Income-tax v. M. K. Stremann.



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