Conversion of self-acquired property into joint family property can constitute a transfer and gift under the Gift-tax Act.

The Gift-tax Act, 1958 treats a declaration converting self-acquired property into joint Hindu family property as a transfer where the owner divests exclusive ownership and diminishes his own property while increasing the value of the family property. The statutory definition in section 2(xxiv)(d) is broader than the Transfer of Property Act and covers transactions intended to reduce the value of one person's property and benefit another person, including a Hindu undivided family. Where such conversion is made without adequate consideration, it is treated as a gift under section 2(xii) read with section 4(a) of the Act.

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Issues: Whether the declaration by which self-acquired property was impressed with the character of joint Hindu family property amounted to a transfer and gift under the Gift-tax Act, 1958.

Analysis: The statutory definition of "transfer of property" in section 2(xxiv)(d) is wider than the Transfer of Property Act and includes any transaction intended to diminish directly or indirectly the value of a person's own property and to increase the value of the property of another person. A Hindu undivided family falls within the expression "any other person". By the declaration converting self-acquired property into joint family property, the declarant divested himself of exclusive ownership, diminished the value of his property, and increased the value of the joint family property. The transaction therefore answered the statutory description of a transfer, and since the transfer was without adequate consideration, it was a gift within section 2(xii) and section 4(a) of the Act.

Conclusion: The conversion of self-acquired property into joint family property amounted to a transfer and constituted a gift under the Gift-tax Act, 1958, in favour of the Revenue and against the assessee.

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