Blending self-acquired property with HUF assets is not a transfer and does not create gift-tax liability.

Throwing self-acquired property into the common hotch-pot of a Hindu undivided family and later dividing it among family members does not amount to a gift under the Gift-tax Act, 1958. The article explains that the statutory definition of gift requires a voluntary transfer without consideration, and the inclusive definition of "transfer of property" does not extend to transactions that are not transfers in law. Blending separate property into joint family stock is treated under Hindu law as abandonment of separate rights and impressing the property with joint family character, not as a transfer between juristic entities. Section 4(d) was also inapplicable because the transaction was not an appropriation from vested joint property.

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Issues: Whether the assessee's act of throwing self-acquired property into the common hotch-pot of a Hindu undivided family and then dividing it among family members amounted to a gift within the meaning of the Gift-tax Act, 1958.

Analysis: The definition of gift under section 2(xii) of the Gift-tax Act, 1958 substantially corresponds to the ordinary law concept of gift as a voluntary transfer without consideration. The inclusive definition of "transfer of property" in section 2(xxiv)(d) of the Gift-tax Act, 1958 was held not to create a fiction covering transactions which are not transfers at all. A partition in a Mitakshara family does not involve any transfer, and the same principle applies to blending or throwing separate property into common stock. Such blending is explained by Hindu law as an act by which the owner abandons separate rights and impresses the property with the character of joint family property, without any transfer from one juristic entity to another. Section 4(d) of the Gift-tax Act, 1958 was found inapplicable because the transaction was not an appropriation from out of vested joint property in the manner contemplated by that provision.

Conclusion: The transaction did not amount to a gift under the Gift-tax Act, 1958 and was not liable to gift-tax on that footing.

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