Voluntary transfer without consideration qualifies as taxable gift under the Gift-tax Act, despite family arrangement context.

A voluntary transfer of movable property made out of the assessee's share in a family arrangement was held to be a taxable gift under the Gift-tax Act, 1958. The court reasoned that the minor grandson had no enforceable right against the assessee at the earlier partition, and the assessee was under no legal obligation to allot property to him. Because the transfer was made without consideration in money or money's worth, it fell within the wider statutory definition of "gift" in section 2(xii), regardless of any family or practical considerations behind the arrangement. The transfer was therefore taxable and the answer was against the assessee.

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Issues: Whether the transfer of movable properties worth Rs. 1,46,500 made under the family arrangement dated 25 October 1957 constituted a taxable gift under the Gift-tax Act, 1958.

Analysis: On the admitted facts, the minor grandson had no enforceable right against the assessee's share at the earlier partition, and the assessee was under no legal obligation to allot property to him. The transfer was made entirely out of the assessee's share and without consideration in money or money's worth. The definition of "gift" in section 2(xii) of the Gift-tax Act is wider than the corresponding concept under the Transfer of Property Act, and any voluntary transfer without such consideration falls within it, irrespective of any other family or practical considerations that may have motivated the arrangement.

Conclusion: The transfer amounted to a taxable gift under the Gift-tax Act, 1958, and the answer was against the assessee.

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