1979 (4) TMI 7 - HC - Income Tax

Female HUF member unable to blend self-acquired property with HUF - Income rightfully hers

The Supreme Court held that a female member of a Hindu undivided family (HUF) does not have the right to blend her self-acquired property with the HUF ... Female Member, HUF Issues:1. Whether a female member of a Hindu undivided family (HUF) has the right to blend her self-acquired property into the common property of the HUF.2. Whether a transaction purported to be blending can be deemed as a gift in law.3. Whether the income from the self-acquired property of a female member of an HUF should be assessed in her hands or in the hands of the HUF.Analysis:The judgment involves the question of whether a female member of an HUF has the right to blend her self-acquired property into the common property of the HUF. The assessee, a female member of an HUF, attempted to transfer half of her immovable property to the HUF by declaration. The Income Tax Officer (ITO) held that the assessee, being a female member, lacked the authority to blend her self-acquired property with the HUF property. Both the Appellate Authority and the Income-tax Appellate Tribunal upheld this view. The Tribunal raised the question of whether the assessee had the right to blend her property into the HUF and be assessed accordingly for the years 1968-69 and 1969-70.The judgment delves into the concept of blending and gift concerning immovable property. Blending, as explained by the Supreme Court, involves sharing one's property with joint family members without surrendering one's interest. In this case, the Supreme Court's explanation indicates that a female member of an HUF cannot blend her self-acquired property with the HUF property due to the absence of coparcenary rights. The judgment distinguishes blending from gifting, emphasizing the legal requirements for a valid gift, including possession transfer and acceptance by the donee. The counsel for the assessee argued that the failed blending transaction should be deemed a gift, relying on a Supreme Court observation in a previous case.The judgment references legal precedents to differentiate blending from gifting in the context of immovable property. It highlights that a gift of immovable property necessitates a registered instrument, which was lacking in the present case. The judgment discusses a Supreme Court case where a unilateral declaration by a male coparcener did not constitute a transfer due to the unilateral nature of blending. It also clarifies that a female member's blending of property with the HUF does not qualify as a gift without registration. The judgment concludes that the female member had no right to blend her property with the HUF and that the income from the property rightfully belonged to her for the assessment years in question.In conclusion, the judgment affirms that the female member of the HUF lacked the authority to blend her self-acquired immovable property with the HUF property. It clarifies that the failed blending transaction cannot be deemed a gift in the absence of registration for immovable property. Consequently, the income from the property remained assessable in the hands of the female member for the relevant assessment years.