ISMAIL, J. - (1.)THIS is a petition under section 26(3) of the Gift-tax Act, 1958, by the Commissioner of Gift-tax, Tamil Nadu-II, Madras-34, requesting this court to direct the Income-tax Appellate Tribunal to refer the following questions of law for the opinion of this court "1. Whether, on the facts and in the circumstances of the case, it has been rightly held by the Tribunal that the gifts made by the karta in the assessee's case were void ?.2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee was not liable to gift-tax for assessment year 1970-71 ?.3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee could be said to have avoided the gift by executing the cancellation deed revoking the gifts made?" The facts that gave rise to these questions are as follows: There was a joint family consisting of a father and two sons, namely, Rathinaswamy Moopanar, the father, and his two sons, Alagiriswamy and Palaniswamy. On January 12, 1959, there was a partition of the properties among these three persons and Alagiriswamy was allotted 28.3 acres of agricultural land.
(2.)THE said Alagiriswamy had two minor sons and two unmarried daughters and he along with his wife and the sons and daughters constituted a Hindu undivided family. On January 13, 1970, acting as the karta of a Hindu undivided family, Alagiriswamy executed three settlement deeds in favour of his three married sisters, Jayalakshmi, Dhanalakshmi and Nagalakshmi, settling in all 17.91 acres of land out of 28.3 acres obtained by him in the partition between himself, his father and the brother. Subsequently, on April 21, 1970, the said Alagiriswamy executed three deeds revoking the settlements made on January 13, 1970. Under those circumstances, the question that came up for consideration was whether there was a valid gift by Alagiriswamy on January 13, 1970, so as to render the same liable to gift-tax. THE contention of the assessee was that the gifts were void ab initio and that contention was accepted by the Tribunal. It is the correctness of that conclusion that is challenged in the form of questions referred to aboveWe are of the opinion that the conclusion of the Tribunal is correct in law. Alagiriswamy obtained the properties under the partition and, therefore, they constituted ancestral properties in his hands with regard to his own minor sons.
The three married sisters were in the position of strangers to the family. If the father had died undivided and Alagiriswamy became the karta of the family, there may be a moral obligation on the part of Alagiriswamy to provide for his sisters, whether at the time of the marriage or afterwards. In this case the partition took place between the father and the two sons and if any provision were to be made for the sisters of Alagiriswamy, it should have been at that partition itself, and, therefore, the subsequent settlements purported to be made by Alagiriswamy in favour of his three married sisters who were practically in the position of strangers to the Hindu undivided family of which he was the karta, were totally void, and, hence, even the subsequent revocations were only superfluous. There is no dispute that a gift which is void ab initio by the law applicable to the same will not be liable to gift-tax under the Gift-tax ActIn view of the above, the conclusion of the Tribunal is correct and this petition is dismissed. The assessee will be entitled to his costs from the Commissioner. Counsel's fee is fixed at Rs. 250.