SATISH CHANDRA, J. - (1.) ONE Sri Jagannath Pd. Pandey had large agricultural holding of about 61 Bighas. On 12th Oct., 1971 he executed a deed of gift of that holding in favour of his two sons-Brij Behari Lal and Krishna Behari Lal. Within three months of the execution of the deed of gift Jagan Nath Pd. Pandey died. The question arose whether the gift was liable to tax. The GTO held that the holding was owned individually by the donor and the gift was valid. The taxable gift was assessed at Rs. 56,000/- and on that basis assessment under GT Act followed.
(2.) THE assessee took up the matter in appeal. The AAC relying upon the order passed by the CED (A) under the ED Act relating to deceased Jagan Nath Pd. held that the agricultural holding had belonged to the HUF of which Jagan Nath Pd. was the Karta. The gift was invalid. The assessment order was reversed. The Revenue felt aggrieved and went up in appeal to the Tribunal. The Tribunal held that the agricultural land being ancestral belongs to the HUF. A Karta could not validly gift coparcenary property in favour of the coparceners, as it would be making a gift to one's own self. In other words, it was found that the coparceners having been co-shares already had interest in the gifted property and, hence, no valid gift could be made in their favour. The appeal was dismissed. At the instance of the CIT the Tribunal as referred the following question of law : "Whether on the facts and in the circumstances of the case the gift of agricultural holding made on 12th Oct., 1971 by late Jagan Nath Prasad Pandey in favour of his two sons Sarva Sri Bij Behari Lal and Krishna Behari Lal was valid in law ?" It is settled law that coparcenary property cannot be gifted by one coparcener in favour of another coparcener. See CGT Patiala vs. Taj Nath (1972) 86 ITR 96 (Punj) (FB) and Nattuswamy & Anr. vs. GTO & Anr. The correctness of the finding that gift of ancestral property belonging to an HUF in favour of the members of such a family is void cannot be doubted.
(3.) MR . Gulati appearing for the Revenue urged that the Tribunal was in error in assuming that the agricultural land was HUF property simply because it was ancestral. The Tribunal should have found out facts in order to establish that it was HUF property. In the first place it should have been Sir or Khud Kasht land because such land alone could be gifted by personal law prior to the abolition of Zamindari. In the next place, it should have been found whether the two sons who were members of the family were born prior to 1st July, 1952, the date of vesting under the U. P. Zamindari Abolition and Land Reforms Act. If they were born afterwards, they would not have any share in the holding in question even if it were Sir or Khud Kasht prior to the abolition of Zamindari, because in that event the father being the only member of the family will become the sole Bhumidhar of the holding. The submission is sound. In the absence of findings on these preliminary facts the conclusion that the agricultural land belonged to the HUF including the sons was based on assumption which does not have any basis on facts.;