Blending of separate property into HUF hotchpot was ineffective here, so the share transfer was not a taxable gift.

Transfer of shares by a female member into the family hotchpot of an HUF consisting only of herself and her husband was not a valid gift chargeable to gift-tax. The transfer was expressly conditioned so that the karta had no power of disposition and the property would revert to the assessee if disposition arose, showing no effective divestment of beneficial ownership. The text applies the principle that a gift requires voluntary transfer, acceptance, and an intention to part with ownership, and notes that blending is a unilateral act. As a female member without a right to demand partition, the blending was ineffective, and the deeming provisions invoked by the revenue did not change the result.

---

---

Issues: Whether the transfer of shares by a female member into the family hotchpot of a Hindu undivided family consisting only of herself and her husband constituted a valid gift chargeable to gift-tax.

Analysis: The transfer was accompanied by a clear stipulation that the karta would have no power of disposition and that the property would revert to the assessee on any question of disposition. The reasoning applied the settled principle that a gift requires a voluntary transfer with acceptance and an intention to divest beneficial ownership. It was further noted that blending of separate property with Hindu undivided family property is a unilateral act and, in the case of a female member without a right to demand partition, such blending is ineffective. On that footing, the transfer did not amount to a gift, and the deeming provisions relied upon by the revenue did not alter that result.

Conclusion: The transfer of shares did not constitute a valid gift and was not liable to gift-tax; the order cancelling the assessment was .

---