Tenants-in-common remain individually assessable for gift tax when a common deed does not create an association of persons.

Co-owners holding property as tenants-in-common with definite shares remain taxable in their individual capacities for gift-tax purposes; a common gift deed does not, by itself, convert separate owners into an association of persons or body of individuals. The Gift-tax Act, 1958 was applied according to the legal incidents of co-ownership, and the court held that the Act did not alter general property law or the separate character of each donee's share. Assessment as an association of persons was therefore improper, and the assessee-co-owners were assessable only individually.

---

---

Issues: Whether the gift made by two co-owners holding property as tenants-in-common could be assessed in the status of an association of persons or body of individuals, or only in their individual capacities.

Analysis: The definition of "person" under the Gift-tax Act, 1958 and the charging provision were applied to the nature of the ownership held by the assessees. The property had devolved on the two donees as co-tenants with definite and separate shares. A gift by them of property held in common did not alter their legal status into an association or a body of individuals, and the fact that the gift was made under one document did not convert separate gifts into a collective taxable unit. The Act did not change the general law of property or the incidents of ownership by tenants-in-common.

Conclusion: The assessment as an association of persons was not proper, and the assessees were liable to be assessed only in their individual capacities.

Final Conclusion: The determination affirmed that co-owners holding defined shares as tenants-in-common do not become an association of persons merely because they execute a common gift deed.

Ratio Decidendi: Where property is held by co-owners as tenants-in-common with definite shares, a common gift deed does not by itself create an association of persons or body of individuals for gift-tax purposes.

---