Coparcenary partition, not gift-taxable transfer, was found on the family corpus and nucleus of acquisitions.

The transaction recorded in the 11 February 1965 partition deed was treated as a partition of coparcenary property, not a gift liable to gift-tax, because the assessee had earlier obtained most properties through family partition and the remaining assets were also held to form part of the family corpus. The Tribunal's finding that the family earnings provided the nucleus for later acquisitions meant the entire property covered by the deed was coparcenary property. On that factual basis, the deed effected a division of joint family property rather than a taxable transfer by gift, and the broader personal law question was left undecided.

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Issues: Whether the transaction recorded in the partition deed dated 11 February 1965 was a partition of coparcenary property or a gift liable to gift-tax.

Analysis: The decisive finding was that the assessee had earlier acquired the bulk of the properties through a family partition and that the remaining properties also formed part of the family corpus, with the earnings from the family properties providing the nucleus for subsequent acquisitions. That finding, affirmed by the Tribunal, established that the entire property covered by the 1965 deed was coparcenary property. On that factual foundation, the transaction was a partition of joint family property and not a transfer by way of gift. In view of this clear finding, it was unnecessary to examine the wider question relating to the personal law applicable to the family.

Conclusion: Question No. 2 was answered in the affirmative in favour of the assessee and against the Revenue.

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