Unilateral transfer into joint family hotchpot is not a gift under the Gift-tax Act, the Kerala High Court held.

Throwing self-acquired property into the joint Hindu family hotchpot was treated as a unilateral act, and not a "transaction" of the bilateral or multilateral kind contemplated by the Gift-tax Act. Because the statutory description under section 2(xii) read with section 2(xxiv)(d) required a transaction entered into with intent to diminish the value of the transferor's property and increase another's property, the assessee's conduct did not satisfy the definition of a gift. The act was therefore outside the scope of gift-tax as framed by those provisions.

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Issues: Whether the assessee's act of throwing his self-acquired properties into the hotchpot of the joint Hindu family amounted to a gift within the meaning of section 2(xii) read with section 2(xxiv)(d) of the Gift-tax Act, 1958.

Analysis: The expression "transaction" was construed as an act of a bilateral or multilateral character, not a merely unilateral act. The assessee's conduct in throwing self-acquired property into the joint family hotchpot was a unilateral act and therefore did not answer the statutory description of a transaction entered into with intent to diminish the value of his own property and increase the value of another's property. On that footing, the question whether the act amounted to a gift did not survive for decision on any broader basis.

Conclusion: The assessee's act did not constitute a gift within the meaning of section 2(xii) read with section 2(xxiv)(d) of the Gift-tax Act, 1958, and the question was answered in the negative in favour of the assessee.

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