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Issues: Whether a gift made by the karta, being the sole surviving coparcener of a Hindu undivided family, to his wife out of Hindu undivided family assets was entitled to exemption under section 5(1)(viii) of the Gift-tax Act, 1958.
Analysis: The assessee was the sole surviving coparcener and, as such, was competent under Hindu law to alienate the property in favour of his wife for love and affection. The gift was not shown to be prohibited by Hindu law. The view that the only male member of a Hindu undivided family can validly transfer the property was supported by the earlier decisions relied upon by the Court. On these facts, the gift could not be denied the statutory exemption claimed under the Gift-tax Act.
Conclusion: The question was answered in the affirmative in favour of the assessee and against the Revenue.
Ratio Decidendi: A gift by the sole surviving coparcener of a Hindu undivided family to his wife out of family assets is valid under Hindu law and is entitled to exemption under section 5(1)(viii) of the Gift-tax Act, 1958.
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