COMMISSIONER OF GIFT TAX Vs. MAHARAJA KUMAR KAMAL SINGH

JUDGEMENT

(1.) A consolidated statement of the case has been submitted by the Income-tax Appellate Tribunal, Patna Bench, Patna (hereinafter referred to as " the Tribunal "), under Section 26(1) of the Gift-tax Act, 1958 (hereinafter referred to as " the Act "), referring the following common question of law for the opinion of this court :

(2.) THE relevant facts of the case can be culled out from the statement of the case. THE assessment years involved are 1964-65 and 1965-66. For both these years returns had been filed declaring taxable gifts at Rs. 7,086 and Rs. 4,970 for the two years respectively. THE Gift-tax Officer assessed the value of the taxable gifts at Rs. 2,1 3,971 for the assessment year 1964-65 and determined the tax payable by the assessee at Rs. 44,529. In the assessment year 1965-66, the Gift-tax Officer determined the value of the taxable gifts at Rs. 1,06,520 and determined the tax payable by the asses-see at Rs. 5,503.

(3.) THE Tribunal accepted this argument of the assessee and held that the properties gifted and transferred in the years under consideration belonged to the Hindu undivided family of which the assessee was a member and he made those gifts and transfers in his capacity as the manager or karta of the joint Hindu family. THE Tribunal further held that Sections 27(ii) of the Income-tax Act, 1961, enacted a legal fiction by which the holder of an impartible estate was deemed to be the individual owner of all the properties comprised in the estate. However, that fiction was held to be limited for the purposes of Sections 22 to 28 of the Income-tax Act. Similar provision was made in Section 4(6) of the Wealth-tax Act and that was also limited to the purpose of the Wealth-tax Act, 1957.