Voidable HUF gift by karta cannot justify protective assessment when validity is questioned by a stranger.

A gift made by a karta of a joint Hindu family out of HUF property to a family member is not void ab initio; it is only voidable at the instance of persons whose interests are affected. A stranger cannot challenge its validity, and gifts by a Hindu father or managing member may be valid within reasonable limits for pious purposes or family benefit. On that footing, the Department could not treat the transaction as warranting a protective assessment merely because it doubted validity, and deletion of the word "protective" from the gift-tax assessment was upheld.

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Issues: Whether the deletion of the word "protective" from the gift-tax assessment was justified, and whether the gift made by the karta of a joint Hindu family to a nephew could be treated as invalid for the purpose of the assessment.

Analysis: The gift was made out of HUF property by the karta to a member of the family, and the applicable legal principle was that such a gift is not void ab initio but only voidable at the instance of those whose interests are affected. A stranger has no basis to challenge the validity of such a transaction, and the authorities relied on recognised that gifts by a Hindu father or managing member may be valid within reasonable limits for pious purposes or family benefit. On the facts, the gift could not be characterised as a transaction warranting a protective assessment merely because the Department doubted its validity.

Conclusion: The deletion of the word "protective" was upheld and the assessee succeeded on the issue.

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