Decided on July 24,1982



B.S. Ahuja, Judicial Member - (1.) THE assessee has 50 per cent share in the HUF properties, which originally belonged to Shri Surajmal, her husband, who had died on 11-12-1949, leaving behind his widow, the assessee and a son Murlidhar Gattani. She relinquished her interest in the HUF properties by a deed of relinquishment dated 13-3-1968. Accordingly, gift-tax proceedings were started against her, since in the opinion of the ITO, relinquishment of her share amounted to a gift under Section 4(c) of the Gift-tax Act, 1958 ('the Act'). After hearing detailed arguments on behalf of the assessee, the GTO held that there was a chargeable gift-tax under Section 4(c) and brought it to tax.
(2.) It was urged before the Commissioner (Appeals) that the assessee is not a coparcener of the HUF of Murlidhar Gattani and, therefore, she does not have a right to claim a partition, Her right is limited only to a share, if a partition takes place. Since the partition had not taken place when the relinquishment deed was executed, she had no specific interest in the properties of the HUF, which she could have gifted or transferred. Reliance was placed on the Gujarat High Court ruling in CGT v. Mrs. Taramati Hariprasad Vasa [1969] 74 ITR 211 (FB). The Commissioner (Appeals) rejected this contention. The admitted position was that Surajmal formed a HUF with his son Murlidhar. Surajmal died in December 1949, therefore, by virtue of the provisions of Section 3(2) of the Hindu Women's Right to Property Act, 1937, the assessee acquired the same interest in the property, which her husband had while he was alive. Sub-section (3) of Section 3 of the said Act, gave the assessee a limited interest known as the Hindu Women's Estate, but she was also given a right to claim partition in the same manner as a coparcener. On the death of Surajmal, his interest devolved on the assessee. The limitation on her right was only in respect of the right of alienation. The said Act was repealed by the Hindu Succession Act, 1956. Section 14 of the Hindu Succession Act lays down that any property possessed by a female Hindu, whether acquired before or after the commencement of the Act shall be held by her, as a full owner and not as a limited owner. Thus, Section 14 of the Hindu Succession Act further enlarged the right and interest of the assessee in the property. The correct legal position, therefore, was that the assessee was the full owner of her 50 per cent share in the properties of the HUF, together with a further right to claim partition as and when she liked. As regards the question whether the assessee was possessed of the interest in the HUF property, when the Hindu Succession Act came into force, the learned Commissioner (Appeals) quoted from page 901 of 14th edition of Mulla's Hindu Law and from the Supreme Court decision in Sukhram v. Gauri Shankar [1968] 1 SCR 476 for the proposition that she was possessed of the property on the coming into force of the Hindu Succession Act. The Jearned Commissioner (Appeals) distinguished the Gujarat High Court ruling in the case of Taramati Hariprasad (supra), since in that case there was no widow, but only the karta's wife who had surrendered her interest when her husband was alive. The Commissioner (Appeals), therefore, upheld the assessment to gift-tax. The assessee is aggrieved and is in appeal.
(3.) ALTHOUGH, there are five grounds of appeal, the learned counsel for the assessee did not press any other ground except the one which has been discussed above in the order of the Commissioner (Appeals), i.e., the relinquishment of the undivided share of the assessee in the property of the HUF did not amount to a gift and contended that the property left by Surajmal on his death came to the son Murlidhar by survivorship and to his widow, the assessee, by virtue of the Hindu Women's Right to Property Act, but both of them held the property as members of the HUF. The undivided share of the assessee in the said property held by the HUF could not be said to be in her possession, since there had been no partition. The learned counsel for the assessee further contended that since the assessee's share in the property had not been carved out, she was not competent to dispose it of without a partition. The learned counsel distinguished the ruling of the Supreme Court in Sukhram's case (supra) on the ground that the question of possession was not argued before the Supreme Court. He relied on the Gujarat High Court ruling in Taramati Haripasad's case (supra) which was followed in CIT v. Dr. Babubhai Mansukhbhai [1977] 108 ITR 417. Reliance was also placed on CED v. Alladi Kuppuswamy [1977] 108 ITR 439 (SC).;

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